QWEST COMMUNICATIONS INTERNATIONAL INC, S-4, 1997-06-30

QWEST COMMUNICATIONS INTERNATIONAL INC
S-4, 1997-06-30
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1997

REGISTRATION NO. 333-

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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QWEST COMMUNICATIONS INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 4813 84-1339282
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

555 SEVENTEENTH STREET, SUITE 1000
DENVER, COLORADO 80202
(303) 291-1400
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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ROBERT S. WOODRUFF
EXECUTIVE VICE PRESIDENT--FINANCE
QWEST COMMUNICATIONS INTERNATIONAL INC.
555 SEVENTEENTH STREET, SUITE 1000
DENVER, COLORADO 80202
(303) 291-1400
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE FOR THE REGISTRANT)

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COPIES TO:
MARTHA D. REHM, ESQ. DAVID J. BEVERIDGE, ESQ.
HOLME ROBERTS & OWEN LLP SHEARMAN & STERLING
1700 LINCOLN STREET, SUITE 4100 599 LEXINGTON AVENUE
DENVER, COLORADO 80203 NEW YORK, NEW YORK 10022-6069
(303) 861-7000 (212) 848-4000

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.

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If the Securities registered on this Form are to be offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [_]

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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
10 7/8% Series B Senior Notes due 2007... $250,000,000 100%(3) $256,419,271 $77,703
Principal
Amount(2)
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(2) of the Securities Act of 1933, as amended.
(2) The maximum principal amount of 10 7/8% Series B Senior Notes due 2007
that may be issued in connection with the exchange offer to which this
Registration Statement relates.
(3) Principal amount plus accrued interest.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
JUNE 30, 1997

PROSPECTUS

QWEST COMMUNICATIONS INTERNATIONAL INC. [LOGO OF QWEST COMMUNICATIONS
OFFER TO EXCHANGE INTERNATIONAL INC. APPEARS HERE]
10 7/8% SERIES B SENIOR NOTES DUE 2007 FOR ANY AND ALL OF ITS OUTSTANDING 10
7/8% SENIOR NOTES DUE 2007

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ],
1997, UNLESS EXTENDED; PROVIDED IT MAY NOT BE EXTENDED BEYOND [ ], 1997.

Qwest Communications International Inc., a Delaware corporation ("Qwest" or the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal (which
together constitute the "Exchange Offer"), to exchange $1,000 principal amount
of its 10 7/8% Series B Senior Notes Due 2007 (the "Exchange Notes") for each
$1,000 principal amount of its outstanding 10 7/8% Senior Notes Due 2007 (the
"Old Notes") of which $250 million in aggregate principal amount are
outstanding as of the date hereof, which exchange has been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
registration statement of which this Prospectus is a part (the "Registration
Statement"). The form and terms of the Exchange Notes will be identical in all
material respects to the form and terms of the Old Notes except that (i) the
exchange will have been registered under the Securities Act and therefore the
Exchange Notes will not bear legends restricting the transfer thereof, (ii) the
interest and interest rate step-up provisions will be modified or eliminated as
appropriate and (iii) holders of the Exchange Notes will not be entitled to
certain rights of holders of the Old Notes under the Registration Agreement (as
defined herein), which rights with respect to Old Notes will terminate upon the
consummation of the Exchange Offer. See "Description of the Notes--Exchange
Offer; Registration Rights." The Exchange Notes will evidence the same debt as
the Old Notes (which they replace) and will be entitled to the benefits of an
Indenture to be dated as of [ ], 1997 governing the Exchange Notes (the
"Indenture"), the form of which will be identical in all material respects to
the Indenture dated as of March 31, 1997 governing the Old Notes (except as
aforesaid). The Old Notes and the Exchange Notes are sometimes referred to
herein collectively as the "Notes." See "The Exchange Offer" and "Description
of the Notes."

The Company will accept for exchange any and all validly tendered Old Notes not
withdrawn prior to 5:00 p.m., New York City time, on [ ], 1997 ("Expiration
Date"); provided, however, that if the Company, in its sole discretion, has
extended the period of time for which the Exchange Offer is open, the term
"Expiration Date" means the latest time and date to which the Exchange Offer is
extended; provided further, that in no event will the Exchange Offer be
extended beyond [ ], 1997. Tenders of Old Notes may be withdrawn at any time
prior to the Expiration Date. Old Notes may be tendered only in integral
multiples of $1,000.

The Exchange Notes will mature on April 1, 2007. The Exchange Notes will be
issued without coupons and in fully registered form only, in minimum
denominations of $1,000 and integral multiples thereof. The Exchange Notes will
be subject to redemption at the option of the Company, in whole or in part, at
any time on or after April 1, 2002, upon not less than 30 nor more than 60
days' prior notice, at the redemption prices set forth herein, plus accrued and
unpaid interest thereon (if any) to the redemption date. In addition, at any
time prior to April 1, 2000, the Company may redeem up to 35% of the originally
issued principal amount of the Exchange Notes at a redemption price equal to
110.875% of the principal amount of the Exchange Notes plus accrued and unpaid
interest thereon (if any) to the redemption date, with the net proceeds of one
or more Public Equity Offerings (as defined) resulting in gross proceeds of at
least $100.0 million in the aggregate. Within 30 days of the occurrence of a
Change of Control (as defined), the Company will be required to make an Offer
to Purchase (as defined) all outstanding Exchange Notes at a price in cash
equal to 101% of the principal amount of the Exchange Notes plus accrued and
unpaid interest thereon and premium, if any, to the purchase date. The Company
may not have the financial resources necessary to satisfy its obligations to
repurchase the Exchange Notes and other debt that may become repayable upon a
Change of Control. See "Description of the Notes--Optional Redemption" and "--
Certain Covenants--Change of Control."

The Exchange Notes will be senior unsecured obligations of the Company ranking
pari passu in right of payment with all other existing and future senior
unsecured indebtedness of the Company, and will be senior in right of payment
to all existing and future subordinated indebtedness of the Company. See
"Capitalization" and "Description of the Notes--General."

SEE "RISK FACTORS" BEGINNING ON PAGE 15 FOR A DISCUSSION OF CERTAIN FACTORS TO
BE CONSIDERED BY HOLDERS WHO TENDER THEIR OLD NOTES IN THE EXCHANGE OFFER.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

The date of this Prospectus is [July ], 1997.
<PAGE>

The Old Notes were sold by the Company on March 31, 1997 to Salomon Brothers
Inc, Donaldson, Lufkin & Jenrette Securities Corporation and Goldman, Sachs &
Co. (the "Initial Purchasers") pursuant to a Purchase Agreement dated March
25, 1997 by and among the Company and the Initial Purchasers (the "Purchase
Agreement"). Pursuant to the Purchase Agreement, the Company and the Initial
Purchasers entered into a Registration Agreement dated as of March 31, 1997
("Registration Agreement") which granted the holders of the Old Notes certain
exchange and registration rights. The Exchange Offer is being made to satisfy
certain of the Company's obligations under the Registration Agreement.

Based upon no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company believes
that the Exchange Notes issued pursuant to the Exchange Offer in exchange for
Old Notes would in general be freely transferable after the Exchange Offer
without further registration under the Securities Act if the holder of the
Exchange Notes represents (i) that it is not an "affiliate," as defined in
Rule 405 of the Securities Act, of the Company, (ii) that it is acquiring the
Exchange Notes in the ordinary course of its business and (iii) that it has no
arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Notes;
provided that, in the case of broker-dealers, a prospectus meeting the
requirements of the Securities Act be delivered as required. However, the
Commission has not considered the Exchange Offer in the context of a no-action
letter and there can be no assurance that the staff of the Commission would
make a similar determination with respect to the Exchange Offer as in such
other circumstances. Holders of Old Notes wishing to accept the Exchange Offer
must represent to the Company that such conditions have been met. Each broker-
dealer that receives Exchange Notes for its own account pursuant to the
Exchange Offer, where it acquired the Old Notes exchanged for such Exchange
Notes for its own account as a result of market-making or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with the resale of such Exchange Notes. The Letter of Transmittal states that
by so acknowledging and by delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Old Notes where such Old Notes were
acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of one
year after consummation of the Exchange Offer, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. A
broker-dealer that delivers such a prospectus to purchasers in connection with
such resales will be subject to certain of the civil liability provisions
under the Securities Act, and will be bound by the provisions of the
Registration Agreement (including certain indemnification and contribution
rights and obligations). See "The Exchange Offer--Resale of the Exchange
Notes" and "Plan of Distribution."

The Company will not receive any proceeds from the Exchange Offer and will
pay all of its expenses incident thereto. Tenders of Old Notes pursuant to the
Exchange Offer may be withdrawn at any time prior to the Expiration Date. In
the event that the Company terminates the Exchange Offer and does not accept
for exchange any Old Notes, the Company will promptly return the Old Notes to
the holders thereof. See "The Exchange Offer."

Prior to this Exchange Offer, there has been no public market for the Notes.
The Company does not intend to list the Exchange Notes on any securities
exchange or to seek approval for quotation through any automated quotation
system. There can be no assurance that an active market for the Exchange Notes
will develop. To the extent that a market for the Exchange Notes does develop,
the market value of the Exchange Notes will depend upon many factors,
including prevailing interest rates, market conditions, yields on alternative
investments, general economic conditions, the Company's financial condition
and results of operations and other conditions. Such conditions might cause
the Exchange Notes, to the extent that they are actively traded, to trade at a
significant discount from face value. See "Risk Factors--Absence of Public
Market."

2
<PAGE>

The Exchange Notes will bear interest at the same rate and on the same terms
as the Old Notes. Consequently, interest on the Exchange Notes will accrue at
the rate of 10 7/8% per anum and will be payable semiannually in arrears on
April 1 and October 1 of each year, commencing October 1, 1997. Interest on
each Exchange Note will accrue from the last interest payment date on which
interest was paid on the surrendered Old Note or, if no interest has been paid
on such Old Note, from the date of issuance of the Old Notes. Consequently,
holders whose Old Notes are accepted for exchange will be deemed to have
waived the right to receive any accrued but unpaid interest on the Old Notes.

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ADDITIONAL INFORMATION

The Company is required to file reports and other information with the
Securities and Exchange Commission (the "Commission") pursuant to the
information requirements of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"). The Company intends to furnish the holders of
the Exchange Notes with annual reports containing consolidated financial
statements audited by independent certified public accountants following the
end of each fiscal year and with quarterly reports containing unaudited
financial information for each of the first three quarters of each fiscal year
following the end of such quarter.

The Company has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act with respect to the Exchange Offer. As permitted
by the rules and regulations of the Commission, this Prospectus, which is a
part of the Registration Statement, omits certain information, exhibits,
schedules and undertakings set forth in the Registration Statement. For
further information pertaining to the Company and the securities offered
hereby, reference is made to such Registration Statement and the exhibits and
schedules thereto. Statements contained in this Prospectus as to the contents
or provisions of any documents referred to herein are not necessarily
complete, and in each instance, reference is made to the copy of the document
filed as an exhibit to the Registration Statement.

The Registration Statement may be inspected without charge at the office of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
the Registration Statement may be obtained from the Commission at prescribed
rates from the Public Reference Section of the Commission at such address, and
at the Commission's regional offices located at 7 World Trade Center, 13th
Floor, New York, New York 10048, and at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, registration
statements and certain other filings made with the Commission through its
Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system are
publicly available through the Commission's site on the Internet's World Wide
Web, located at http://www.sec.gov.

THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.

3
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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including the Consolidated Financial Statements and the notes
thereto, appearing elsewhere in this Prospectus. A glossary of relevant terms
used in the telecommunications business is included at the end of this
Prospectus. References to "Qwest" mean Qwest Communications International Inc.
and its predecessors, and references to the "Company" mean Qwest together with
its subsidiaries, including Qwest Corporation ("QC") and Qwest Communications
Corporation ("QCC").

THE COMPANY

The Company is a facilities-based provider of communications services to
interexchange carriers and other communications entities ("Carrier Services")
and to businesses and consumers ("Commercial Services"), and it constructs and
installs fiber optic communications systems for interexchange carriers and
other communications entities, as well as for its own use ("Network
Construction Services"). The Company is expanding its existing long distance
network into an approximately 13,000 route mile coast-to-coast, technologically
advanced, fiber optic telecommunications network (the "Qwest Network"). The
Company will employ, throughout substantially all of the Qwest Network, a self-
healing SONET four-fiber ring architecture equipped with the most advanced
commercially available fiber and transmission electronics manufactured by
Lucent Technologies ("Lucent") and Northern Telecom Inc. ("Nortel"),
respectively. The Qwest Network's advanced fiber and transmission electronics
are expected to provide the Company with lower installation, operating and
maintenance costs than older fiber systems generally in commercial use today.
In addition, the Company has entered into construction contracts for the sale
of dark fiber along the route of the Qwest Network, which will reduce the
Company's net cost per fiber mile with respect to the fiber it retains for its
own use. As a result of these cost advantages, the Company believes it will be
well-positioned to capture market share and take advantage of the rapidly
growing demand for data transmission, multimedia and long haul voice capacity.

Construction of the Qwest Network is scheduled to be completed by late 1998.
Under the Company's plans, the Qwest Network will extend approximately 13,000
route miles coast-to-coast and connect 92 metropolitan areas that represent
approximately 65% of the originating and terminating long distance traffic in
the United States. Through a combination of the Qwest Network and leased
facilities, the Company will continue to offer interstate services in all 48
contiguous states. The Qwest Network also will connect to international cable
heads for trans-Atlantic and trans-Pacific transmission and cross-border points
to Canada and Mexico.

The Company believes that demand from interexchange carriers and other
communications entities for advanced, high bandwidth voice, data and video
transmission capacity will increase over the next several years due to
regulatory and technical changes and other industry developments. These
anticipated changes and developments include: (i) continued growth in capacity
requirements for high speed data transmission, ATM and Frame Relay services,
Internet and multimedia services and other new technologies and applications;
(ii) continued growth in demand for existing long distance services; (iii)
entry into the market of new communications providers; (iv) requirements of the
four principal nationwide carriers (AT&T, MCI, Sprint and WorldCom) to replace
or augment portions of their older systems; and (v) reform in regulation of
domestic access charges and international settlement rates, which the Company
expects will lower long distance rates and fuel primary demand for long
distance services.

THE QWEST NETWORK

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in California (the "Cal-Fiber" system) carrying traffic between Los Angeles and
Sacramento, and the other in Texas connecting Dallas and Houston, approximately
3,200 route miles of dark fiber installed in conduit, and approximately 1,700
route miles of vacant conduit; (ii) right-of-way agreements in place for
approximately 5,300 additional route miles of planned construction for the
Qwest Network; (iii) an approximately 3,500 mile operating digital microwave
system (the "Microwave System"); (iv) approximately 15,000 DS-3 miles of fiber
transmission capacity leased by the Company from other carriers, used primarily
to extend the Company's switched services for originating and terminating
traffic beyond the boundaries of the Company's lit fiber network; and (v) five
digital switches.

Upon completion, key characteristics of the Qwest Network will include:

. Technologically Advanced Platform. The Company is installing
technologically advanced fiber optic cable and electronic equipment in a
uniform configuration throughout the entire Qwest Network, which will
provide full coast-to-coast SONET four-fiber ring protection. The Company
is deploying an advanced network management system (Nortel's Integrated
Network Management Solutions) that will give the Company's Carrier
Services customers the ability to monitor and reconfigure their leased
capacity on an essentially real time basis from their own network
management centers and the ability to rapidly increase or reduce
bandwidth to better match their needs. This new technology also will
allow Qwest to provide bandwidth on demand for both its carrier and
commercial customers, significantly reducing the time typically
associated with installation of services. The Qwest Network's
technologies include Lucent's non-zero dispersion shifted fiber and
Nortel's dense wave division multiplexing, forward error correction
technology and SONET four-fiber ring technology at high optical carrier
("OC") levels that enable the highest commercially available capacity
transmission (OC-192) and data integrity level (10-/1//5/ Bit Error
Rate).

. High Security and Reliability. The Qwest Network is designed for superior
security and reliability, based on (i) bi-directional SONET four-fiber
ring architecture, a self-healing system that allows for instantaneous
rerouting and virtually eliminates downtime in the event of a fiber cut;
(ii) fiber cable installed in high density polyethylene conduit generally
buried 42^-56^ below the ground; and (iii) extensive use of railroad
rights-of-way, which typically offer greater protection of the fiber
system than other systems built over more public rights-of-way such as
highways, telephone poles or overhead power transmission lines.

. Additional Capacity and Flexibility. The Qwest Network will contain two
conduits along substantially all of its route. The first conduit will
contain a cable generally housing at least 96 fibers, and the second
conduit will serve as a spare. The spare conduit will allow for future
technology upgrades and expansion of capacity at costs significantly
below the cost of new construction. After existing and anticipated dark
fiber sales, the Company presently intends to retain ownership of at
least 48 fibers for its own use along substantially all of the route of
the Qwest Network. With the combined use of non-zero dispersion shifted
fiber, dense wave division multiplexing and high bit rate transmission
electronics, each of the fibers retained by the Company can achieve
substantially greater capacity per fiber than standard, single mode fiber
now in use.

STRATEGY

The Company's objective is to become a leading, coast-to-coast facilities-
based provider of communications services to other communications providers,
businesses and consumers. To achieve this objective, the Company intends to:

5
<PAGE>

advanced fiber optic cable and electronic equipment permit high capacity
transmission over longer distances between regeneration/amplifier
facilities than older fiber systems. This translates into generally lower
installation and operating costs. These costs typically constitute a
significant portion of the overall cost of providing telecommunications
services.

. Build on Network Construction Expertise and Existing Network Assets. The
Company has built over 6,100 route miles of telecommunications conduit
systems over the last eight years for itself and major interexchange
carriers including AT&T, MCI, Sprint and WorldCom. Network Construction
Services currently employs over 570 experienced construction personnel
led by a six-member senior construction management team with combined
construction experience of over 140 years. The Company utilizes its own
fleet of railroad equipment and has in place railroad and other right-of-
way agreements covering over 87% of the Qwest Network and already has
installed approximately 45% of the route miles of conduit required for
the Qwest Network. In addition, the Company has fixed-price supply
agreements for the provision of all the fiber and transmission
electronics necessary to construct and activate the Qwest Network.

. Establish Low Cost Position. The Company has entered into three major
construction contracts for the sale of dark fiber in the Qwest Network
that will allow the Company to achieve a low net capital investment in
the Qwest Network and share future operating and maintenance costs.
Earnings from these agreements will reduce the Company's net cost per
fiber mile with respect to the fiber that it retains for its own use. The
Company believes that this network cost advantage, coupled with the
operating and maintenance cost advantages of owning an entirely new
network with advanced fiber and equipment uniformly deployed systemwide,
will enable it to establish a low cost position in the long distance
industry relative to its competitors.

. Build on Management Experience. The Company's management team and board
of directors include individuals with significant experience at major
telecommunications companies. Mr. Joseph Nacchio became the Company's
President and Chief Executive Officer in January 1997. Mr. Nacchio was
Executive Vice President of the Consumer and Small Business Division at
AT&T, where he was employed for 27 years prior to joining the Company.
Mr. Nacchio has extensive management experience in marketing, sales,
network operations and engineering, having served as Chief Engineer and a
Vice President of Network Operations at AT&T. Mr. Richard T. Liebhaber,
who was a Director and served as Executive Vice President and Chief
Strategy and Technology Officer of MCI until his retirement in 1995, is a
Director of Qwest. He is providing technical advisory services to the
Company under a consulting agreement. See "Management."

. Grow Carrier Revenue Base. The Company is currently focusing on expanding
Carrier Services to increase its revenue stream and reduce per unit
costs, targeting short-term capacity sales on a segment-by-segment basis
as the Qwest Network is deployed and activated, and is increasingly
seeking longer-term, high volume capacity agreements from major carriers.
In addition to traditional telecommunications carriers, the Company is
marketing to Internet service providers and other data service companies.

. Develop Commercial Services. The Company plans to build on its Carrier
Services experience to expand its presence in the Commercial Services
market by creating a distinctive brand identity for "Qwest" and
aggressively marketing its existing and planned voice, data and other
transmission products and services. The Company plans to build direct end
user relationships by developing strong distribution channels, providing
competitive pricing and superior network quality and offering enhanced,
market-driven services to businesses and consumers.

6
<PAGE>

DARK FIBER SALES

The Company entered into agreements in 1996 with both Frontier and WorldCom
and in 1997 with GTE whereby each is purchasing certain dark fiber along the
route of the Qwest Network. Proceeds from these dark fiber agreements will
provide cash for a significant portion of the total estimated costs to
construct the Qwest Network and complete construction relating to the dark
fiber sold to these purchasers and are expected to provide the Company with a
strategic network cost advantage on the fibers that the Company retains for the
Qwest Network. The Frontier and GTE agreements each provide for the purchase of
24 fibers along all of the route of the Qwest Network. The WorldCom agreement
provides for the purchase of 24 fibers along certain selected segments of the
Qwest Network and 36 fibers along other selected segments.

The Company believes that significant opportunities exist to sell additional
dark fiber throughout the Qwest Network, and management has identified, and is
in various stages of negotiations with, potential customers. However, the
Company does not expect to enter into additional agreements of the size and
scope of the Frontier and GTE contracts. The Company presently intends to
retain ownership of at least 48 fibers for its own use along substantially all
of the route of the Qwest Network.

BUILD-OUT PLAN FOR THE QWEST NETWORK

The Company estimates the total cost to construct and activate the Qwest
Network and complete construction of the dark fiber sold to Frontier, WorldCom
and GTE will be approximately $1.4 billion. Of this amount, the Company had
already expended approximately $400.0 million as of May 31, 1997. The Company
anticipates remaining total cash outlays for these purposes of approximately
$500.0 million in 1997 and $500.0 million in 1998. Estimated total expenditures
for 1997 include the Company's commitment to purchase a minimum quantity of
fiber for approximately $257.0 million (subject to quality and performance
specifications), of which approximately $100.0 million had been expended as of
May 31, 1997. Estimated total expenditures for 1997 and 1998 together also
include approximately $100.0 million for the purchase of electronic equipment.
In addition, the Company anticipates approximately $97.0 million of capital
expenditures in 1997 and 1998 to support growth in Carrier Services and
Commercial Services.

As of the date of this Prospectus, the Company has obtained the following
sources of funds to complete the build-out: (i) approximately $1.0 billion
under the Frontier, WorldCom and GTE contracts and additional smaller
construction contracts for sales of dark fiber, of which approximately $286.0
million had already been paid and $733.0 million remained to be paid at May 31,
1997; (ii) $90.0 million of vendor financing; (iii) $117.8 million in net
proceeds from the sale on March 31, 1997 of $250.0 million in principal amount
of the Company's Old Notes remaining after repayment of certain existing debt;
and (iv) approximately $320.0 million in net proceeds from the sale (the
"Initial Public Offering") on June 27, 1997 of 15,525,000 shares of the
Company's common stock (the "Common Stock").

The Company expects to finance the completion of construction of the Qwest
Network, as well as its debt service and working capital needs, primarily
through a combination of the funding sources identified above and future
borrowings. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources."

With the completion of the 13,000 route mile network, Qwest will provide
services nationally to its customers primarily over its own facilities, using
leased facilities in those portions of the country not covered by the Qwest
Network. Qwest will continue to evaluate the economics of extending its core
network versus continuing to lease network capacity. In this regard, the
Company is considering extensions in the Southeast United States, the
California Valley and, perhaps, the Pacific Northwest. The Company has made no
final decisions in this regard, and any decisions would be dependent, among
other things, upon the Company's assessment of the potential for dark fiber
sales or long-term leases of high volume capacity and the availability of
additional capital on acceptable terms.

7
<PAGE>

THE EXCHANGE OFFER

The Exchange Offer........ The Company is offering to exchange $1,000
principal amount of Exchange Notes for each $1,000
principal amount of Old Notes that is properly
tendered and accepted. The form and terms of the
Exchange Notes are the same as the form and terms
of the Old Notes except that (i) the exchange will
have been registered under the Securities Act and
therefore the Exchange Notes will not bear legends
restricting the transfer thereof, (ii) the interest
and interest rate step-up provisions will be
modified or eliminated as appropriate and (iii)
holders of the Exchange Notes will not be entitled
to certain rights of holders of the Old Notes under
the Registration Agreement (as defined herein),
which rights with respect to Old Notes will
terminate upon the consummation of the Exchange
Offer. See "--The Exchange Notes." The issuance of
the Exchange Notes is intended to satisfy certain
obligations of the Company contained in the
Registration Agreement. Subject to certain
conditions, a holder who wishes to tender must
transmit a properly completed and duly executed
Letter of Transmittal to Bankers Trust Company (the
"Exchange Agent") on or prior to the Expiration
Date. For procedures for tendering, see "The
Exchange Offer."

8
<PAGE>

Notes. See "The Exchange Offer--Resale of the
Exchange Notes" and "Plan of Distribution."

Registration Agreement.... The Old Notes were sold by the Company on March 31,
1997 to the Initial Purchasers pursuant to the
Purchase Agreement. Pursuant to the Purchase
Agreement, the Company and the Initial Purchasers
entered into the Registration Agreement. This
Exchange Offer is intended to satisfy certain
obligations of the Company contained in the
Registration Agreement, which terminate upon the
consummation of the Exchange Offer. The holders of
the Exchange Notes are not entitled to any exchange
or registration rights with respect to the Exchange
Notes. The Old Notes are subject to the payment of
additional interest under certain circumstances if
the Company is not in compliance with its
obligations under the Registration Agreement. See
"Description of the Notes--Exchange Offer;
Registration Rights."

Expiration Date;
Withdrawal............... The Exchange Offer will expire at 5:00 p.m., New
York City time, on the "Expiration Date." As used
herein, the term "Expiration Date" means 5:00 p.m.,
New York City time, on [ ], 1997; provided,
however, that if the Company, in its sole
discretion, has extended the period of time for
which the Exchange Offer is to remain open, the
term "Expiration Date" means the latest time and
date to which the Exchange Offer is extended;
provided further that in no event will the Exchange
Offer be extended beyond [ ], 1997. Tenders of
Old Notes pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date
by sending a written notice of withdrawal to the
Exchange Agent.

Any Old Notes so withdrawn will be deemed not to
have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Notes not
accepted for exchange for any reason will be
returned without expense to the tendering holder
thereof as promptly as practicable after the
expiration or termination of the Exchange Offer.
See "The Exchange Offer--Terms of the Exchange
Offer; Period for Tendering Old Notes."

Federal Income Tax
Consequences............. In the opinion of counsel, the exchange of the Old
Notes for Exchange Notes pursuant to the Exchange
Offer should not constitute a taxable exchange for
federal income tax purposes. See "Certain United
States Federal Income Tax Considerations."

Use of Proceeds........... There will be no proceeds to the Company from the
exchange pursuant to the Exchange Offer.

Exchange Agent............ Bankers Trust Company is serving as Exchange Agent
in connection with the Exchange Offer.

9
<PAGE>

CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES

Holders of Old Notes who do not exchange their Old Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legends thereon as a
consequence of the issuance of the Old Notes pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities
Act and applicable state securities laws. Accordingly, such Old Notes may only
be offered, sold, pledged or otherwise transferred (A)(i) to a person whom the
seller reasonably believes is a qualified institutional buyer within the
meaning of Rule 144A under the Securities Act ("Rule 144A") in a transaction
meeting the requirements of Rule 144A, (ii) in an offshore transaction meeting
the requirements of Rule 903 or Rule 904 of Regulation S under the Securities
Act, or (iii) pursuant to an exemption from registration under the Securities
Act provided by Rule 144 thereunder (if available) and (B) in accordance with
all applicable securities laws of the states of the United States. The Company
does not anticipate that it will register the Old Notes under the Securities
Act. See "Risk Factors--Consequences of Failure to Exchange Old Notes" and "The
Exchange Offer--Consequences of Failure to Exchange."

THE EXCHANGE NOTES

The form and terms of the Exchange Notes are the same as the form and terms
of the Old Notes except that (i) the exchange will have been registered under
the Securities Act and therefore the Exchange Notes will not bear legends
restricting the transfer thereof, (ii) the interest and interest rate step-up
provisions will be modified or eliminated as appropriate and (iii) holders of
the Exchange Notes will not be entitled to certain rights of holders of the Old
Notes under the Registration Agreement, which rights with respect to Old Notes
will terminate upon the consummation of the Exchange Offer. See "Exchange
Offer; Registration Rights." The Exchange Notes will evidence the same debt as
the Old Notes (which they replace) and will be issued under, and be entitled to
the benefits of, the Indenture. See "Description of the Notes" for further
information and for definitions of certain capitalized terms used below.

In the Exchange Offer, the holders of Old Notes will receive Exchange Notes
with the same interest rate as the interest rate on the Old Notes. Interest on
each Exchange Note will accrue from the last interest payment date on which
interest was paid on the surrendered Old Note or, if no interest has been paid
on such Old Note, from the date of issuance of the Old Notes. Consequently,
Holders whose Old Notes are accepted for exchange will be deemed to have waived
the right to receive any accrued but unpaid interest on the Old Notes.

Maturity Date............. April 1, 2007.

Interest.................. Interest on the Notes will accrue at a rate of 10
7/8% per annum and will be payable semiannually in
arrears on April 1 and October 1 of each year,
commencing October 1, 1997.

Ranking................... The Notes will be senior unsecured obligations of
the Company, ranking pari passu in right of payment
with all existing and future senior unsecured
indebtedness of the Company, and will be senior in
right of payment to all existing and future
subordinated indebtedness of the Company. On March
31, 1997, Qwest issued the Old Notes in the
principal amount of $250.0 million, receiving net
proceeds of approximately $242.0 million. Qwest

10
<PAGE>

applied a portion of such proceeds to repay certain
indebtedness of its subsidiaries. On a pro forma
basis, after giving effect to the Initial Public
Offering and the sale of the Old Notes and
application of a portion of the net proceeds
therefrom to repay certain indebtedness of
subsidiaries, the Company would have had
approximately $267.0 million of long-term debt
(including the current portion thereof),
approximately $324.6 million of stockholder's
equity and a debt-to-equity ratio of 0.82 to 1.0 at
March 31, 1997. The Notes effectively will be
subordinated to all existing and future third-party
indebtedness and other liabilities of the Company's
subsidiaries (including trade payables). As of
March 31, 1997, after giving effect to the sale of
the Old Notes and the application of a portion of
the proceeds thereof to repay certain indebtedness
of the Company's subsidiaries, the total
liabilities of the Company's subsidiaries (after
the elimination of loans and advances by the
Company to its subsidiaries) would have been
approximately $142.8 million, of which
approximately $17.0 million in indebtedness would
have been secured by certain assets of the
borrowing subsidiaries. See "Description of Certain
Indebtedness." Any rights of the Company and its
creditors, including the holders of Notes, to
participate in the assets of any of the Company's
subsidiaries upon any liquidation or reorganization
of any such subsidiary will be subject to the prior
claims of that subsidiary's creditors (including
trade creditors).

Sinking Fund.............. None.

Optional Redemption....... The Notes will be subject to redemption at the
option of the Company, in whole or in part, at any
time or from time to time on or after April 1,
2002, upon not less than 30 nor more than 60 days'
prior notice, at the redemption prices set forth
herein, plus accrued and unpaid interest thereon
(if any) to the redemption date. In addition, prior
to April 1, 2000, the Company may redeem up to 35%
of the originally issued principal amount of the
Notes at a redemption price equal to 110.875% of
the principal amount of the Notes plus accrued and
unpaid interest thereon (if any) to the redemption
date, with the net proceeds of one or more Public
Equity Offerings (as defined) resulting in gross
proceeds of at least $100.0 million in the
aggregate; provided that at least 65% of the
originally issued principal amount of the Notes
would remain outstanding immediately after giving
effect to such redemption.

Change of Control......... Within 30 days of the occurrence of a Change of
Control (as defined), the Company will be required
to make an Offer to Purchase (as defined) all
outstanding Notes at a price in cash equal to 101%
of the principal amount of the Notes plus accrued
and unpaid interest thereon and premium, if any, to
the purchase date. The Company may not have the
financial resources

11
<PAGE>

necessary to satisfy its obligations to repurchase
the Notes and other debt that may become repayable
upon a Change of Control. See "Description of the
Notes--Certain Covenants-- Change of Control."

Certain Covenants......... The Indenture contains certain covenants that,
among other things, limit the ability of the
Company and its subsidiaries to incur additional
indebtedness, issue stock of subsidiaries, pay
dividends or make other distributions, repurchase
equity interests or subordinated indebtedness,
engage in sale and leaseback transactions, create
certain liens, enter into certain transactions with
affiliates, sell assets of the Company and its
subsidiaries, and enter into certain mergers and
consolidations. The covenants contained in the
Indenture are subject to certain significant
exceptions. See "Description of the Notes--Certain
Covenants."

RISK FACTORS

Prospective participants in the Exchange Offer should consider all the
information contained in this Prospectus in connection with the Exchange Offer.
In particular, prospective participants should consider the factors set forth
herein under "Risk Factors."

12
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The selected data presented below under the captions "Statement of Operations
Data," "Other Financial Data" and "Balance Sheet Data" as of the end of and for
each of the years in the five-year period ended December 31, 1996 are derived
from the Consolidated Financial Statements of the Company, which financial
statements have been audited by KPMG Peat Marwick LLP, independent certified
public accountants. The financial data as of the end of and for the three
months ended March 31, 1997 and 1996 are derived from unaudited interim
financial statements. The unaudited interim financial statements include all
adjustments, consisting of normal recurring accruals, that management considers
necessary for a fair presentation of the financial position as of the end of
and results of operations for these interim periods. Results of operations for
the interim periods are not necessarily indicative of the results of operations
for a full year. Consolidated Financial Statements of the Company as of
December 31, 1996 and 1995 and for each of the years in the three-year period
ended December 31, 1996 and unaudited interim financial statements as of the
end of and for the three months ended March 31, 1997 and 1996 are included
elsewhere in this Prospectus. The information set forth below should be read in
conjunction with the discussion under "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business" and the Consolidated
Financial Statements and unaudited interim financial statements of the Company
and the notes thereto, appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
--------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenue:
Carrier
services(1)(2)(3)..... $ 41,561 $ 53,064 $ 50,240 $ 67,789 $ 57,573 $ 18,493 $ 11,199
Commercial services.... -- 969 8,712 20,412 34,265 7,013 9,411
--------- -------- -------- -------- -------- -------- --------
41,561 54,033 58,952 88,201 91,838 25,506 20,610
Network construction
services(4)........... 11,751 15,294 11,921 36,901 139,158 9,126 52,083
--------- -------- -------- -------- -------- -------- --------
Total revenue.......... 53,312 69,327 70,873 125,102 230,996 34,632 72,693
--------- -------- -------- -------- -------- -------- --------
Operating expenses:
Telecommunications
services.............. 31,557 41,240 48,239 81,215 80,368 23,862 18,063
Network construction
services.............. 9,730 15,515 9,369 32,754 87,542 6,847 36,265
Selling, general and
administrative(5)..... 10,270 15,622 21,516 37,195 45,755 14,527 13,947
Growth share plan(6)... 2,000 2,600 -- -- 13,100 -- 13,100
Depreciation and
amortization.......... 5,020 5,270 2,364 9,994 16,245 4,049 3,962
--------- -------- -------- -------- -------- -------- --------
Total operating
expenses.............. 58,577 80,247 81,488 161,158 243,010 49,285 85,337
--------- -------- -------- -------- -------- -------- --------
Loss from operations.... (5,265) (10,920) (10,615) (36,056) (12,014) (14,653) (12,644)
Gain on sale of contract
rights(7).............. -- -- -- -- -- -- 7,710
Gain on sale of
telecommunications
service agreements(2).. -- -- -- -- 6,126 -- --
Gain on sale of
network(1)............. -- 126,521 -- -- -- -- --
Interest income
(expense), net......... (2,687) (3,127) (28) (2,466) (4,373) (582) (304)
Other income (expense),
net.................... (610) (763) (42) 55 60 (54) (1,996)
--------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
income taxes........... (8,562) 111,711 (10,685) (38,467) (10,201) (15,289) (7,234)
Income tax expense
(benefit).............. (1,988) 43,185 (3,787) (13,336) (3,234) (5,310) (2,458)
--------- -------- -------- -------- -------- -------- --------
Net earnings (loss)..... $ (6,574) $ 68,526 $ (6,898) $(25,131) $ (6,967) $ (9,979) $ (4,776)
========= ======== ======== ======== ======== ======== ========
Earnings (loss) per
share(8)............... $ (0.07) $ 0.78 $ (0.08) $ (0.29) $ (0.08) $ (0.11) $ (0.05)
Weighted average number
of shares
outstanding(8)......... 88,158 88,158 88,158 88,158 88,158 88,158 88,158
OTHER FINANCIAL DATA:
EBITDA(9)............... $ (855) $ (824) $ (6,338) $(26,007) $ 6,912 $ (9,059) $(10,678)
Net cash provided by
(used in) operating
activities............. $ 1,377 $ (7,125) $ 3,306 $(56,635) $ 32,524 $ (1,185) $ 33,359
Net cash provided by
(used in) investing
activities............. $ (11,202) $107,496 $(41,712) $(58,858) $(52,622) $(11,606) $(56,922)
Net cash provided by
(used in) financing
activities............. $ 11,549 $(95,659) $ 34,264 $113,940 $ 25,519 $ 15,904 $177,327
Capital
expenditures(10)....... $ 11,000 $ 3,794 $ 40,926 $ 48,732 $ 85,842 $ 12,021 $ 78,922
Ratio of earnings to
fixed charges(11)...... -- 5.68 -- -- -- -- --
</TABLE>

13
<PAGE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996 AS OF MARCH 31, 1997
----------------------- --------------------
<S> <C> <C>
OPERATING DATA:
Route miles of conduit
installed............... 3,650 4,900
Route miles of dark fiber
installed............... 1,800 2,250
Route miles of lit fiber
installed............... 900 900
Switches................. 5 5
Minutes of Use(12)....... 382,000,000 107,000,000
</TABLE>

(1) In November 1993, the Company sold substantially all of its then owned
fiber optic network capacity and related equipment and assets to a third-
party purchaser for $185.0 million (the "1993 Capacity Sale"). After
deducting the carrying value of the assets sold and direct costs associated
with the 1993 Capacity Sale, the Company recognized a gain of approximately
$126.5 million. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business."
(2) In July 1996, the Company sold the telecommunications service agreements of
its dedicated line customer business on leased capacity to an unrelated
third party for $5.5 million and had received $4.5 million of the purchase
price in cash as of December 31, 1996. As a result of the sale, the Company
recognized a gain of approximately $6.1 million. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
(3) The Company acquired the Microwave System through its purchase of Qwest
Transmission Inc. in January 1995, and the acquired company contributed
$13.2 million to total revenue for the year ended December 31, 1995.
(4) In 1996, the Company entered into construction contracts for sales of dark
fiber with Frontier and WorldCom whereby the Company agreed to sell dark
fiber along the route of the Qwest Network for a purchase price of
approximately $545.0 million. As a result of the activity under these
agreements, the Company recorded Network Construction Services revenue of
approximately $121.0 million in 1996 and approximately $49.0 million in the
three months ended March 31, 1997. See "Business--The Qwest Network--Dark
Fiber and High Volume Capacity Sales."
(5) Selling, general and administrative expenses include the following
nonrecurring expenses incurred by the Company: (i) $5.6 million in 1993 to
provide for the transfer of customers to leased capacity as a result of the
1993 Capacity Sale; (ii) $2.0 million in 1994 to relocate its corporate
headquarters from San Francisco to Denver and consolidate its
administrative functions in Denver; and (iii) $2.6 million in 1996 to
restructure its operations, including the direct sales group.
(6) Growth Share Plan expenses reflect compensation expense related to the
estimated increase in the value of the growth shares outstanding. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Management--Growth Share Plan," and note 15 to the
Consolidated Financial Statements of the Company.
(7) In March 1997, the Company sold certain contract rights related to the 1993
Capacity Sale for $9.0 million. As of March 31, 1997, the Company has
received $7.0 million in consideration and has reduced its liability for
associated costs by approximately $0.7 million. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
(8) Earnings (loss) per share and weighted average number of shares outstanding
are adjusted to reflect an increase in the authorized capital stock of
Qwest and a stock dividend of 86,490,000 shares effected prior to the
Initial Public Offering.
(9) EBITDA represents net earnings (loss) before interest, income taxes,
depreciation and amortization, certain nonrecurring expenses described in
note 5 above, gain on sale of contract rights in 1997, gain on sale of
telecommunications service agreements in 1996 and gain on the 1993 Capacity
Sale (which are nonrecurring). EBITDA includes earnings from the
construction contracts for the sale of dark fiber that the Company will use
to provide cash for the construction cost of the Qwest Network. EBITDA does
not represent cash flow for the periods presented and should not be
considered as an alternative to net earnings (loss) as an indicator of the
Company's operating performance or as an alternative to cash flows as a
source of liquidity and may not be comparable with EBITDA as defined by
other companies. The Company believes that EBITDA is commonly used by
financial analysts and others in the telecommunications industry. Without
the effect of Growth Share Plan expense, EBITDA would have been $20.0
million, $1.8 million and $1.1 million for the years ended December 31,
1996, 1993 and 1992, respectively, and $2.4 million for the three months
ended March 31, 1997.
(10) Capital expenditures include expenditures for property and equipment,
accrued capital expenditures and initial obligations under capital leases.
(11) For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of earnings (loss) before income taxes, plus fixed
charges excluding capitalized interest. Fixed charges consist of interest
expensed and capitalized, plus amortization of deferred financing costs,
plus the portion of rent expense under operating leases deemed by the
Company to be representative of the interest factor, plus preferred stock
dividends on preferred stock of QCC (increased to an amount representing
the pre-tax earnings which would be required to cover such dividend
requirements). The Company had a deficiency of earnings to fixed charges
of $8.9 million and $15.8 million in the three month periods ended March
31, 1997 and 1996, respectively, and $12.6 million, $40.3 million, $11.0
million and $14.5 million in 1996, 1995, 1994 and 1992, respectively.
Excluding the effect of the gains arising from the sale of contract rights
in 1997, telecommunications service agreements in 1996 and the 1993
Capacity Sale, the deficiency of earnings would have been $16.7 million in
the three month period ended March 31, 1997, and $18.7 million and $27.6
million in 1996 and 1993, respectively.
(12) Represents total minutes of use for the year ended December 31, 1996 and
the three months ended March 31, 1997.

14
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, the following risk
factors should be considered carefully in evaluating the Company and its
business before participating in the Exchange Offer.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements that include, among
others, statements concerning the Company's plans to complete the Qwest
Network, expectations as to funding its capital requirements, anticipated
expansion of carrier and commercial services and other statements of
expectations, beliefs, future plans and strategies, anticipated developments
and other matters that are not historical facts. Management cautions the
reader that these forward-looking statements are subject to risks and
uncertainties that could cause actual events or results to differ materially
from those expressed or implied by the statements. The most important factors
that could prevent the Company from achieving its stated goals include, but
are not limited to, failure by the Company to (i) manage effectively and cost
efficiently the construction of the route segments, (ii) enter into additional
customer contracts to sell dark fiber or provide high volume capacity and
otherwise expand its telecommunications customer base on the Qwest Network and
(iii) obtain additional rights-of-way and maintain all necessary rights-of-
way.

CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES

The Exchange Notes will be issued in exchange for Old Notes only after
timely receipt by the Exchange Agent of such Old Notes, a properly completed
and duly executed Letter of Transmittal and all other required documents.
Therefore, holders of Old Notes desiring to tender such Old Notes in exchange
for Exchange Notes should allow sufficient time to ensure timely delivery.
Neither the Exchange Agent nor the Company is under any duty to give
notification of defects or irregularities with respect to tenders of Old Notes
for exchange. Holders of Old Notes who do not exchange their Old Notes for
Exchange Notes pursuant to the Exchange Offer will continue to be subject to
the restrictions on transfer of such Old Notes as set forth in the legends
thereon as a consequence of the issuance of the Old Notes pursuant to
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, the Old Notes may not be offered or sold, unless registered under the
Securities Act, except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable securities laws of states and
other jurisdictions. In addition, any holder of Old Notes who tenders in the
Exchange Offer for the purpose of participating in a distribution of the
Exchange Notes will be required to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. Each broker-dealer that receives Exchange Notes for its own
account in exchange for Old Notes, where such Old Notes were acquired by such
broker-dealer as a result of market-making activities or any other trading
activities, may be deemed to be an "underwriter" within the meaning of the
Securities Act and must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. See "Plan of Distribution,"
"Description of the Notes--Exchange Offer; Registration Rights," and "The
Exchange Offer--Consequences of Failure to Exchange."

ABSENCE OF PUBLIC MARKET

The Exchange Notes are being offered to the holders of the Old Notes. The
Old Notes were resold by the Initial Purchasers to qualified institutional
buyers as defined in Rule 144A under the Securities Act and to institutional
accredited investors within the meaning of Rule 501(a) (1), (2), (3) or (7)
under the Securities Act, and are trading in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") Market, the National
Association of Securities Dealers' screen based, automated market for trading
of securities eligible for resale under Rule 144A. The Exchange Notes

15
<PAGE>

are new securities for which there currently is no market and the Exchange
Offer is not conditioned upon any minimum or maximum aggregate principal
amount of Notes being tendered for exchange. Although the Initial Purchasers
are making a market in the Old Notes and have advised the Company that they
currently intend to make a market in the Exchange Notes, they are not
obligated to do so and may discontinue such market making at any time without
notice. The Company does not currently intend to apply for listing of the Old
Notes or the Exchange Notes on a national securities exchange or automated
quotation system. Accordingly, no assurance can be given that an active market
will develop for any of the Notes or as to the liquidity of the trading market
for any of the Notes. If a trading market does not develop or is not
maintained, holders of the Notes may experience difficulty in reselling such
Notes or may be unable to sell them at all. If a market for the Notes
develops, any such market may be discontinued at any time. To the extent that
a market for the Notes does develop, the market value of the Notes will depend
upon many factors, including prevailing interest rates, market conditions,
yields on alternative investments, general economic conditions, the Company's
financial condition and results of operations and other conditions.
Historically, the market for non-investment grade debt has been subject to
disruptions that have caused substantial volatility in the prices of
securities similar to the Notes. There can be no assurance that, if a market
for the Notes were to develop, such a market would not be subject to similar
disruptions.

RISKS RELATED TO COMPLETING THE QWEST NETWORK; INCREASING TRAFFIC VOLUME

The Company's ability to achieve its strategic objective will depend in
large part upon the successful, timely and cost-effective completion of the
Qwest Network, as well as on achieving substantial traffic volumes on the
Qwest Network. The construction of the Qwest Network will be affected by a
variety of factors, uncertainties and contingencies. Many of these factors are
beyond the Company's control. There can be no assurance that the entire Qwest
Network will be completed as planned for the costs and in the time frame
currently estimated or at all. Although the Company believes that its cost
estimates and the build-out schedule are reasonable, there can be no assurance
that the actual construction costs or time required to complete the Qwest
Network will not substantially exceed current estimates. In addition, the
Company must substantially increase its current traffic volume in order to
realize the anticipated cash flow, operating efficiencies and cost benefits of
the Qwest Network. There can be no assurance that the Company will be able to
achieve such increased traffic volume. See "--Competition" and "--Pricing
Pressures and Industry Capacity."

The successful and timely completion of the Qwest Network will depend, among
other things, upon the Company's ability to manage effectively and cost
efficiently the construction of the route segments and obtain additional
rights-of-way. Successful construction of the Qwest Network also will depend
upon the timely performance by third-party contractors of their obligations.
There can be no assurance that the Company will successfully manage
construction or acquire the remaining necessary rights-of-way.

Any of the foregoing may significantly delay or prevent completion of the
Qwest Network, which would have a material adverse effect on the Company's
financial condition and results of operations.

OPERATING LOSSES AND WORKING CAPITAL DEFICITS

The Company's operations have generated operating losses in recent years and
insufficient cash flow to enable it to meet its debt service requirements,
capital expenditures and other cash needs. The Company had net losses of $7.0
million, $25.1 million, $6.9 million and $6.6 million for each of the years
ended December 31, 1996, 1995, 1994 and 1992, and recognized net income of
$68.5 million for the year ended December 31, 1993. The Company's accumulated
deficit totaled $51.2 million as of March 31, 1997. Although the Company had
positive working capital of $58.6 million as of March 31, 1997, the Company
had working capital deficits of $69.4 million, $2.6 million, $11.9 million,
$11.5 million and $5.6 million as of December 31, 1996, 1995, 1994, 1993 and
1992, respectively. Working capital deficits limit the Company's cash
resources, resulting in reduced liquidity. There can be no

16
<PAGE>

assurance that the Company will be able to achieve or sustain operating
profitability. The Company will require additional capital in order to offset
operating losses and working capital deficits and to support its strategic
objective.

HIGH LEVERAGE; ABILITY TO SERVICE INDEBTEDNESS

The Company is highly leveraged. As of March 31, 1997, the Company had
approximately $311.2 million of long-term debt (including the current portion
thereof) and stockholder's equity of approximately $4.7 million. On a pro
forma basis, after giving effect to the Initial Public Offering and after
giving effect to the application of net proceeds from the sale of the Old
Notes, the Company would have had approximately $267.0 million of long-term
debt (including the current portion thereof), approximately $324.6 million of
stockholders' equity and a debt-to-equity ratio of 0.82 to 1.0 at March 31,
1997. The Indenture and certain debt instruments to which Qwest's subsidiaries
are parties limit but do not prohibit the incurrence of additional
indebtedness by the Company, and the Company expects additional indebtedness
to be incurred by Qwest or its subsidiaries in the future. However, there can
be no assurance that the Company will be successful in obtaining additional
borrowings when required, or that the terms of such indebtedness will not
impair the ability of the Company to develop its business.

The Company's ability to pay the principal of and interest on its
indebtedness will depend upon the Company's future performance, which is
subject to a variety of factors, uncertainties and contingencies, many of
which are beyond the Company's control, and there can be no assurance that the
Company will generate sufficient cash flow in the future to enable it to meet
its anticipated debt service requirements (including those with respect to the
Notes). Although the Company currently anticipates that it will repay the
Notes at maturity with cash flow from operations, there can be no assurance in
this regard. Failure to generate sufficient cash flow may impair the Company's
ability to obtain additional equity or debt financing or to meet its debt
service requirements, including the payment obligations under the Notes. In
such circumstances, the Company may be required to renegotiate the terms of
the instruments relating to its long-term debt or to refinance all or a
portion thereof. There can be no assurance that the Company would be able to
renegotiate successfully such terms or refinance its indebtedness when
required or that the terms of any such refinancing would be acceptable to
management. If the Company were unable to refinance its indebtedness or obtain
new financing under these circumstances, it would have to consider other
options such as the sale of certain assets to meet its debt service
obligations, the sale of equity, negotiations with its lenders to restructure
applicable indebtedness or other options available to it under the law. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The Company's leverage could result in adverse consequences to the holders
of the Notes. Such consequences may include, among other things: (i) the cash
generated by the Company's operations may be insufficient to meet the payment
obligations on the Notes, in addition to paying other indebtedness and
obligations of the Company and its subsidiaries as they become due; (ii) the
Company's ability to obtain any necessary financing in the future for
completion of the Qwest Network or other purposes may be impaired; (iii)
certain of the future borrowings by Qwest or its subsidiaries may be at
variable rates of interest that could cause Qwest to be vulnerable to
increases in interest rates; (iv) future indebtedness of Qwest's subsidiaries
may mature prior to the maturity of the Notes; (v) the Company may be more
leveraged than certain of its competitors, which may be a competitive
disadvantage; and (vi) the Company's vulnerability to the effects of general
economic downturns or to delays or increase in costs of constructing the Qwest
Network will be increased. In addition, the Indenture and other debt
instruments governing existing and future indebtedness contain, or may
contain, covenants that limit the operating and financial flexibility of the
Company and its subsidiaries.

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HOLDING COMPANY STRUCTURE; EFFECTIVE SUBORDINATION OF THE NOTES

Qwest is a holding company with no material assets other than the stock of
its subsidiaries, and the Notes will be obligations exclusively of Qwest. The
Notes are unsecured and rank pari passu in right of payment with all existing
and future senior unsecured indebtedness and trade payables of Qwest. Because
Qwest's operations are conducted through its subsidiaries, Qwest's cash flow
and its ability to meet its own obligations, including payment of interest and
principal obligations on the Notes, are dependent upon the earnings of such
subsidiaries and the distributions of those earnings to Qwest, or upon loans
or other payments of funds made by such subsidiaries to Qwest. Existing debt
agreements of Qwest's subsidiaries impose, and future debt instruments of
Qwest's subsidiaries likely will impose, significant restrictions that affect,
among other things, the ability of Qwest's subsidiaries to pay dividends or
make other distributions or loans and advances to Qwest. The ability of
Qwest's subsidiaries to pay dividends and make other distributions also will
be subject to, among other things, applicable state laws. See "Description of
Certain Indebtedness."

The operating assets of the Company are owned by Qwest's subsidiaries,
effectively subordinating the Notes to all existing and future indebtedness,
trade payables and other obligations of Qwest's subsidiaries. Therefore,
Qwest's rights and the rights of its creditors, including the holders of the
Notes, to participate in the assets of any subsidiary upon the subsidiary's
liquidation or reorganization will be subject to the prior claims of such
subsidiary's creditors, except to the extent that Qwest may itself be a
creditor with recognized claims against the subsidiary, in which case the
claims of Qwest would still be effectively subordinated to any security
interests in or mortgages or other liens on the assets of such subsidiary and
would be subordinate to any indebtedness of such subsidiary senior to that
held by Qwest. As of March 31, 1997, on a pro forma basis after giving effect
to the issuance of the Old Notes and the application of a portion of the
proceeds thereof to repay certain indebtedness of Qwest's subsidiaries, the
total liabilities of Qwest's subsidiaries (after elimination of loans and
advances by Qwest to its subsidiaries) would have been approximately $142.8
million, of which approximately $17.0 million in indebtedness would have been
secured by certain assets of the borrowing subsidiaries. In addition, the
Company has future obligations of $38.3 million under long-term non-cancelable
operating leases, capacity service agreements and right-of-way agreements
requiring future minimum lease payments through the year 2029, assuming the
Company exercises its option, relative to certain rights-of-way, to make
discounted lump-sum payments in lieu of the annual payments the Company is
currently making. If the Company were to continue making such annual payments,
the total amount of payments for the minimum commitment would increase by
approximately $61.4 million. The Indenture limits, but does not prohibit, the
incurrence of additional indebtedness by Qwest and its subsidiaries.
Therefore, both Qwest and its subsidiaries will retain the ability to incur
substantial additional indebtedness and lease obligations, and the Company
expects that it or its subsidiaries will incur substantial additional
indebtedness in the future. See "Description of the Notes--Certain Covenants."

A portion of the assets of Qwest's subsidiaries is encumbered by mortgages
or other security interests or liens, including purchase money equipment
financings. Qwest expects that future indebtedness incurred by its
subsidiaries also may be secured. As a result, any claims of Qwest against its
subsidiaries will be effectively subordinated to indebtedness secured by the
mortgages or other security interests or liens on the assets of such
subsidiaries, which could have material consequences to holders of the Notes.
Such security may include substantially all of the fixed assets of Qwest's
subsidiaries. The value of a substantial portion of such fixed assets is
derived from employing such assets in a telecommunications business. These
assets are highly specialized and, taken individually, can be expected to have
limited marketability. Consequently, in the event of a realization by secured
creditors on the assets of Qwest's subsidiaries, creditors would likely seek
to sell the business as a going concern in order to maximize the proceeds
realized. The price obtained upon any such sale could be adversely affected by
the necessity to obtain approval of the sale from the applicable regulatory
authorities and compliance with other applicable governmental regulations.

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COMPETITION

The telecommunications industry is highly competitive. Many of the Company's
existing and potential competitors in the Carrier Services, Commercial
Services and Network Construction Services markets have financial, personnel,
marketing and other resources significantly greater than those of the Company,
as well as other competitive advantages. Increased consolidation and strategic
alliances in the industry resulting from the Telecommunications Act of 1996
(the "Telecom Act of 1996") could give rise to significant new competitors to
the Company.

The success of the Company's business plan depends in large part on
significant increases in its share of the Carrier Services and Commercial
Services markets in the medium and long term. In the Carrier Services market,
the Company's primary competitors are other carrier service providers. Within
the Carrier Services market, the Company competes with large and small
facilities-based interexchange carriers. For high volume capacity services,
the Company competes primarily with other coast-to-coast and regional fiber
optic network providers. There are currently four principal facilities-based
long distance fiber optic networks (AT&T, MCI, Sprint and WorldCom). The
Company is aware that others are planning additional networks that, if
constructed, could employ similar advanced technology as the Qwest Network.
Upon completion of the Qwest Network, each of Frontier and GTE will have a
fiber network similar in geographic scope and potential operating capability
to that of the Company. Another competitor is constructing, and has already
obtained a significant portion of the financing for, a fiber optic network. As
publicly announced, the scope of that competitor's network is less than that
of the Company. Nevertheless it is expected to compete directly with the Qwest
Network for many of the same customers along a significant portion of the same
routes. The Company also sells switched services to both facilities-based
carriers and nonfacilities-based carriers (switchless resellers), competing
with facilities-based carriers such as AT&T, MCI, Sprint, WorldCom and certain
regional carriers. The Company competes in the Carrier Services market on the
basis of price, transmission quality, network reliability, and customer
service and support. The ability of the Company to compete effectively in this
market will depend upon its ability to maintain high quality services at
prices equal to or below those charged by its competitors. In the Commercial
Services market, the Company's primary competitors include AT&T, MCI, Sprint
and WorldCom, all of whom have extensive experience in the long distance
market. In addition, the Telecom Act of 1996 will allow the RBOCs and others
to enter the long distance market. There can be no assurance that the Company
will be able to compete successfully with existing competitors or new entrants
in its Commercial Services markets. Failure by the Company to do so would have
a material adverse effect on the Company's business, financial condition and
results of operations, including its ability to pay the principal of and
interest on the Notes. See "--Rapid Technological Changes."

DEPENDENCE ON SIGNIFICANT CUSTOMERS

The Company has substantial business relationships with a few large
customers. During 1996 and the first quarter of 1997, the Company's top 10
customers accounted for approximately 69.3% and 79.7%, respectively, of its
consolidated gross revenue. Frontier and WorldCom accounted for 26.3% and
27.8% of such revenue, respectively, in 1996 and 59.0% and 8.8% of such
revenue, respectively, in the first quarter of 1997, attributable primarily to
construction contracts for the sale of dark fiber to these customers that
extend through 1998. In May 1997, the Company entered into another substantial
construction contract for the sale of dark fiber to GTE. The Frontier and GTE
contracts provide for reduced payments and varying penalties for late delivery
of route segments, and allow the purchaser, after expiration of substantial
grace periods (ranging generally from 12 to 18 months depending on the reason
for late delivery and the segment affected), to delete such non-delivered
segment from the system route to be delivered. See "Business--The Qwest
Network--Dark Fiber Sales." A default by any of the Company's dark fiber
purchasers would require the Company to seek alternative funding sources for
capital expenditures. A significant reduction in the level of services the
Company provides for any of its large customers could have a material adverse
effect on the Company's results of

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operations or financial condition. In addition, the Company's business plan
assumes increased revenue from its Carrier Services operations to fund the
expansion of the Qwest Network. Many of the Company's customer arrangements
are subject to termination on short notice and do not provide the Company with
guarantees that service quantities will be maintained at current levels. The
Company is aware that certain interexchange carriers are constructing or
considering new networks. Accordingly, there can be no assurance that any of
the Company's Carrier Services customers will increase their use of the
Company's services, or will not reduce or cease their use of the Company's
services, which could have a material adverse effect on the Company's ability
to fund the expansion of the Qwest Network.

MANAGING RAPID GROWTH

Part of the Company's strategy is to achieve rapid growth by completing the
Qwest Network and using the Qwest Network to exploit opportunities expected to
arise from regulatory and technological changes and other industry
developments. As a result of its strategy, the Company is experiencing rapid
expansion that management expects will continue for the foreseeable future.
This growth has increased the operating complexity of the Company. The
Company's ability to manage its expansion effectively will depend on, among
other things: (i) expansion, training and management of its employee base,
including attracting and retaining highly skilled personnel; (ii) expansion
and improvement of the Company's customer interface systems and improvement or
cost-effective outsourcing of the Company's operational and financial systems;
(iii) development, introduction and marketing of new products, particularly in
Commercial Services; and (iv) control of the Company's expenses related to the
expansion of Carrier Services and Commercial Services. Failure of the Company
to satisfy these requirements, or otherwise manage its growth effectively,
would have a material adverse effect on the Company's business, financial
condition and results of operations, including its ability to pay the
principal of and interest on the Notes.

PRICING PRESSURES AND INDUSTRY CAPACITY

The long distance transmission industry has generally been characterized as
having overcapacity and declining prices since shortly after the AT&T
divestiture in 1984. Although the Company believes that, in the last several
years, increasing demand has resulted in a shortage of capacity and slowed the
decline in prices, the Company anticipates that prices for Carrier Services
and Commercial Services will continue to decline over the next several years
due primarily to (i) installation by the Company and its competitors (certain
of whom are expanding capacity and constructing or considering new networks)
of fiber that provides substantially more transmission capacity than will be
needed over the short or medium term, since the cost of fiber is a relatively
small portion of construction cost, (ii) recent technological advances that
permit substantial increases in the transmission capacity of both new and
existing fiber, and (iii) strategic alliances or similar transactions, such as
long distance capacity purchasing alliances among certain RBOCs, that increase
the parties' purchasing power. Also, the Company's existing construction
contracts for the sale of dark fiber and other potential contracts or
arrangements with other carriers will increase supply and may lower prices for
traffic on the Qwest Network. Such pricing pressure could have a material
adverse effect on the business of the Company and on its financial condition
and results of operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

RAPID TECHNOLOGICAL CHANGES

The telecommunications industry is subject to rapid and significant changes
in technology. For instance, recent technological advances permit substantial
increases in transmission capacity of both new and existing fiber, and the
introduction of new products or emergence of new technologies may reduce the
cost or increase the supply of certain services similar to those provided by
the Company. While the Company believes that for the foreseeable future
technology changes will neither materially affect the continued use of fiber
optic cable nor materially hinder the Company's ability to acquire

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<PAGE>

necessary technologies, the effect of technological changes on the Company's
operations cannot be predicted and could have a material adverse effect on the
Company's business, financial condition and results of operations, including
its ability to pay the principal of and interest on the Notes.

NEED TO OBTAIN AND MAINTAIN RIGHTS-OF-WAY

Although the Company already has right-of-way agreements covering over 87%
of the Qwest Network, the Company must obtain additional rights-of-way and
other permits to install underground conduit from railroads, utilities, state
highway authorities, local governments and transit authorities. There can be
no assurance that the Company will be able to maintain all of its existing
rights and permits or to obtain and maintain the additional rights and permits
needed to implement its business plan on acceptable terms. Loss of substantial
rights and permits or the failure to enter into and maintain required
arrangements for the Qwest Network could have a material adverse effect on the
Company's business, financial condition and results of operations.

REGULATION RISKS

Regulation of the telecommunications industry is changing rapidly, and the
regulatory environment varies substantially from state to state. Moreover, as
deregulation at the federal level occurs, some states are reassessing the
level and scope of regulation that may be applicable to the Company. All of
the Company's operations are also subject to a variety of environmental,
safety, health and other governmental regulations. There can be no assurance
that future regulatory, judicial or legislative activities will not have a
material adverse effect on the Company, or that domestic or international
regulators or third parties will not raise material issues with regard to the
Company's compliance or noncompliance with applicable regulations.

A recent federal legislative change, the Telecom Act of 1996, may have
potentially significant effects on the operations of the Company. The Telecom
Act of 1996, among other things, allows the RBOCs and the General Telephone
Operating Companies to enter the long distance business and enables other
entities, including entities affiliated with power utilities and ventures
between LECs and cable television companies, to provide an expanded range of
telecommunications services. Entry of such companies into the long distance
business would result in substantial additional competition in Commercial
Services and Carrier Services, affecting the Company and its customers, which
may have a material adverse effect on the Company and such customers. However,
the Company believes that entry by the RBOCs and other companies into the
market will create opportunities for the Company to sell fiber or lease long
distance high volume capacity.

The Company monitors compliance with federal, state and local regulations
governing the discharge and disposal of hazardous and environmentally
sensitive materials, including the emission of electromagnetic radiation.
Although the Company believes that it is in compliance with such regulations,
there can be no assurance that any such discharge, disposal or emission might
not

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expose the Company to claims or actions that could have a material adverse
effect on the Company. See "Regulation."

RELIANCE ON KEY PERSONNEL

The Company's operations are managed by a small number of key executive
officers, the loss of any of whom could have a material adverse effect on the
Company. The Company believes that its growth and future success will depend
in large part on its continued ability to attract and retain highly skilled
and qualified personnel. The competition for qualified personnel in the
telecommunications industry is intense and, accordingly, there can be no
assurance that the Company will be able to hire or retain necessary personnel.
The loss of senior management or the failure to recruit additional qualified
personnel in the future could significantly impede attainment of the Company's
financial, expansion, marketing and other objectives. See "Management."

CONCENTRATION OF VOTING POWER; POTENTIAL CONFLICTS OF INTEREST

Philip F. Anschutz, a Director and Chairman of the Company, beneficially
owns approximately 84.8% of the outstanding Common Stock. As a result, Mr.
Anschutz has the power to elect all the directors of the Company and to
control the vote on all other matters, including significant corporate
actions. Certain conflicts may arise between the interests of the holders of
the Notes and other indebtedness of the Company and Mr. Anschutz, as principal
holder of the Company's common stock. Also, Mr. Anschutz is a director and
holds approximately 5% of the stock of Union Pacific Railroad Company,
subsidiaries of which own railroad rights-of-way on which a significant
portion of the Qwest Network will be built. In recent years, the Company has
relied upon capital contributions, advances and guarantees from its parent and
affiliates. The Company intends to finance its own operations in the future
through internally and externally generated funds without financial support
from its parent. See "--Operating Losses and Working Capital Deficits" and "--
High Leverage; Ability to Service Indebtedness."

THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

The Old Notes were sold by the Company on March 31, 1997 to the Initial
Purchasers pursuant to the Purchase Agreement. The Initial Purchasers resold
the Old Notes to qualified institutional buyers as defined in Rule 144A under
the Securities Act and to institutional accredited investors within the
meaning of Rule 501(a) (1), (2), (3) or (7) under the Securities Act. As a
condition to the sale of the Old Notes, the Company and the Initial Purchasers
entered into the Registration Agreement as of March 31, 1997. Pursuant to the
Registration Agreement, the Company agreed that it would (i) file with the
Commission a Registration Statement under the Securities Act with respect to
the Exchange Notes by June 30, 1997; (ii) use its best efforts to cause such
Registration Statement to be declared effective under the Securities Act by
August 28, 1997; and (iii) consummate an offer of the Exchange Notes in
exchange for surrender of the Old Notes by September 29, 1997. A copy of the
Registration Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Registration Statement of
which this Prospectus is a part is intended to satisfy certain of the
Company's obligations under the Registration Agreement and the Purchase
Agreement.

RESALE OF THE EXCHANGE NOTES

Based upon no-action letters issued by the staff of the Commission to third
parties, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes

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<PAGE>

would in general be freely transferable after the Exchange Offer without
further registration under the Securities Act if the holder of the Exchange
Notes represents (i) that it is not an "affiliate," as defined in Rule 405 of
the Securities Act, of the Company, (ii) that it is acquiring the Exchange
Notes in the ordinary course of its business and (iii) that it has no
arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Notes;
provided that, in the case of broker-dealers, a prospectus meeting the
requirements of the Securities Act be delivered as required. However, the
Commission has not considered the Exchange Offer in the context of a no-action
letter and there can be no assurance that the staff of the Commission would
make a similar determination with respect to the Exchange Offer as in such
other circumstances. Holders of Old Notes wishing to accept the Exchange Offer
must represent to the Company that such conditions have been met. Each broker-
dealer that receives Exchange Notes for its own account pursuant to the
Exchange Offer, where it acquired the Old Notes exchanged for such Exchange
Notes for its own account as a result of market-making or other trading
activities, may be deemed to be an "underwriter" within the meaning of the
Securities Act and must acknowledge that it will deliver a prospectus in
connection with the resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Old Notes where such
Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of one year after consummation of the Exchange Offer, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. A broker-dealer that delivers such a prospectus to purchasers in
connection with such resales will be subject to certain of the civil liability
provisions under the Securities Act, and will be bound by the provisions of
the Registration Agreement (including certain indemnification and contribution
rights and obligations). See "Plan of Distribution."

TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES

Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Company will accept for exchange any and all Old Notes
which are properly tendered on or prior to the Expiration Date and not
withdrawn as permitted below. The Company will issue $1,000 principal amount
of Exchange Notes in exchange for each $1,000 principal amount of outstanding
Old Notes surrendered pursuant to the Exchange Offer. Old Notes may be
tendered only in integral multiples of $1,000.

The form and terms of the Exchange Notes are the same as the form and terms
of the Old Notes except that (i) the exchange will be registered under the
Securities Act and hence the Exchange Notes will not bear legends restricting
their transfer, (ii) the interest and interest rate step-up provisions will be
modified or eliminated as appropriate and (iii) holders of the Exchange Notes
will not be entitled to certain rights of holders of Old Notes under the
Registration Agreement, which rights with respect to Old Notes will terminate
upon the consummation of the Exchange Offer. The Exchange Notes will evidence
the same debt as the Old Notes (which they replace) and will be issued under,
and be entitled to the benefits of, the Indenture.

As of the date of this Prospectus, an aggregate of $250 million in principal
amount of the Old Notes is outstanding. This Prospectus, together with the
Letter of Transmittal, is first being sent on or about [July ], 1997, to all
holders of Old Notes known to the Company.

Holders of the Old Notes do not have any appraisal or dissenters' rights
under the Indenture in connection with the Exchange Offer. The Company intends
to conduct the Exchange Offer in accordance with the provisions of the
Registration Agreement and the applicable requirements of the

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<PAGE>

Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder. See "Description of the Notes--Exchange Offer;
Registration Rights."

The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for exchange of any Old Notes, by giving written
notice of such extension to the holders thereof as described below. During any
such extension, all Old Notes previously tendered will remain subject to the
Exchange Offer and may be accepted for exchange by the Company. Any Old Notes
not accepted for exchange for any reason will be returned without expense to
the tendering holder thereof as promptly as practicable after the expiration
of the Exchange Offer.

The Company expressly reserves the right to amend the Exchange Offer. The
Company will give written notice of any extension, amendment or nonacceptance
to the holders of the Old Notes as promptly as practicable, such notice in the
case of any extension to be issued by means of a press release or other public
announcement no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date.

PROCEDURES FOR TENDERING OLD NOTES

The tender to the Company of Old Notes by a holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal. Except as set forth below, a holder who wishes to
tender Old Notes for exchange pursuant to the Exchange Offer must transmit a
properly completed and duly executed Letter of Transmittal, including all
other documents required by such Letter of Transmittal, to the Exchange Agent
at one of the addresses set forth below under "--Exchange Agent" on or prior
to the Expiration Date. In addition, either (i) certificates for such Old
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, or (ii) a timely confirmation of a book-entry transfer (a "Book-
Entry Confirmation") of such Old Notes, if such procedure is available, into
the Exchange Agent's account at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedure for book-entry transfer
described below, must be received by the Exchange Agent prior to the
Expiration Date, or (iii) the holder must comply with the guaranteed delivery
procedures described below.

THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH
DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED,
WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR OLD NOTES
SHOULD BE SENT TO THE COMPANY.

Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trustee or other nominee and who wishes to tender
should contact such registered holder of Old Notes promptly and instruct such
registered holder of Old Notes to tender on behalf of the beneficial owner. If
such beneficial owner wishes to tender on its own behalf, such beneficial
owner must, prior to completing and executing the Letter of Transmittal and
delivering its Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such beneficial owner's name or obtain a
properly completed power of attorney from the registered holder of Old Notes.
The transfer of record ownership may take considerable time. If the Letter of
Transmittal is signed by a person or persons other than the registered holder
or holders of Old Notes, such Old Notes must be endorsed or accompanied by
appropriate powers of attorney, in either case signed exactly as the name or
names of the registered holder or holders that appear on the Old Notes.

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<PAGE>

Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed unless the Old Notes surrendered for exchange
pursuant thereto are tendered (i) by a registered holder of the Old Notes who
has not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution (as defined herein below). In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantees must be by a firm which
is a member of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trustee having an office or correspondent in the United States (collectively,
"Eligible Institutions"). If Old Notes are registered in the name of a person
other than a signer of the Letter of Transmittal, the Old Notes surrendered
for exchange must be endorsed by, or be accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as determined by the
Company in its sole discretion, duly executed by the registered holder with
the signature thereon guaranteed by an Eligible Institution.

All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined
by the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Old Notes not properly tendered or not to accept any
particular Old Notes whose acceptance might, in the judgment of the Company or
its counsel, be unlawful. The Company also reserves the absolute right to
waive any defects or irregularities or conditions of the Exchange Offer as to
any particular Old Notes either before or after the Expiration Date (including
the right to waive the ineligibility of any holder who seeks to tender Old
Notes in the Exchange Offer). The interpretation of the terms and conditions
of the Exchange Offer as to any particular Old Notes either before or after
the Expiration Date (including the Letter of Transmittal and the instructions
thereto) by the Company shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Old Notes
for exchange must be cured within such reasonable period of time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of any defect or
irregularity with respect to any tender of Old Notes for exchange, nor shall
any of them incur any liability for failure to give such notification.

If the Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted.

By tendering, each holder will represent to the Company, among other things,
(i) that it is not an "affiliate," as defined in Rule 405 of the Securities
Act, of the Company, or if it is an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable, (ii) that it is acquiring the Exchange Notes in the
ordinary course of its business and (iii) at the time of the consummation of
the Exchange Offer it has no arrangement or understanding with any person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Notes. If the holder is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading activities,
the holder may be deemed to be an "underwriter" within the meaning of the
Securities Act and is required to acknowledge in the Letter of Transmittal
that it will deliver a prospectus in connection with any resale of such
Exchange Notes; however, by so acknowledging and by delivering a prospectus,
the holder will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES

The Company will accept, promptly after the Expiration Date, all Old Notes
properly tendered and will issue the Exchange Notes promptly after acceptance
of the Old Notes. For purposes of the

25
<PAGE>

Exchange Offer, the Company shall be deemed to have accepted properly tendered
Old Notes for exchange when, as and if the Company has given oral or written
notice thereof to the Exchange Agent, with written confirmation of any oral
notice to be given promptly thereafter.

The Exchange Notes will bear interest at a rate equal to 10 7/8% per annum.
Interest on the Exchange Notes will be payable semiannually in arrears on April
1 and October 1 of each year, commencing October 1, 1997. Holders of Exchange
Notes will receive interest on October 1, 1997 from the last interest payment
date on which interest was paid on the surrendered Old Notes or, if no interest
has been paid on such Old Notes, from the date of initial issuance of the Old
Notes to the date of exchange thereof for Exchange Notes. Consequently, holders
of Old Notes that are accepted for exchange for Exchange Notes will be deemed
to have waived the right to receive any interest accrued on the Old Notes.

In all cases, the issuance of Exchange Notes for Old Notes that are accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of certificates for such Old Notes or a timely
Book-Entry Confirmation of such Old Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility, a properly completed and duly executed Letter
of Transmittal and all other required documents. If any tendered Old Notes are
not accepted for any reason set forth in the terms and conditions of the
Exchange Offer, or if Old Notes are submitted for a greater amount than the
holder desires to exchange, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering holder thereof (or, in the case of
Old Notes tendered by book-entry procedures described below, such non exchanged
Old Notes will be credited to an account maintained with such Book-Entry
Transfer Facility) designated by the tendering holder as promptly as
practicable after the expiration or termination of the Exchange Offer.

BOOK-ENTRY TRANSFER

The Exchange Agent will make a request to establish an account with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Notes may be effected through book-entry transfer at the Book-
Entry Transfer Facility, the Letter of Transmittal or facsimile thereof, with
any required signature guarantees and any other required documents, must, in
any case, be transmitted to and received by the Exchange Agent at one of the
addresses set forth below under "--Exchange Agent" on or prior to the
Expiration Date or the guaranteed delivery procedures described below must be
complied with.

GUARANTEED DELIVERY PROCEDURES

If a registered holder of the Old Notes desires to tender such Old Notes and
the Old Notes are not immediately available, or time will not permit such
holder's Old Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if (i) the tender is made
through an Eligible Institution, (ii) prior to the Expiration Date, the
Exchange Agent has received from such Eligible Institution a properly completed
and duly executed Letter of Transmittal (or a facsimile thereof) and Notice of
Guaranteed Delivery, substantially in the form provided by the Company (by
telegram, telex, facsimile transmission, mail or hand delivery), setting forth
the name and address of the holder of the Old Notes and the amount of Old
Notes, stating that the tender is being made thereby and guaranteeing that
within five trading days (on the Nasdaq Stock Market's National Market (the
"Nasdaq National Market")) after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Old Notes, in
proper form for transfer, or a Book-Entry Confirmation, as the case may be, and
any other documents required by the Letter of

26
<PAGE>

Transmittal will be deposited by the Eligible Institution with the Exchange
Agent, and (iii) the certificates for all physically tendered Old Notes, in
proper form for transfer, or a Book-Entry Confirmation, as the case may be, and
all other documents required by the Letter of Transmittal, are received by the
Exchange Agent within five Nasdaq National Market trading days after the date
of execution of the Notice of Guaranteed Delivery.

WITHDRAWAL RIGHTS

Tenders of Old Notes may be withdrawn at any time prior to the Expiration
Date.

For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at one of the addresses set forth below under
"--Exchange Agent." Any such notice of withdrawal must specify the name of the
person having tendered the Old Notes to be withdrawn, identify the Old Notes to
be withdrawn (including the amount of such Old Notes), and (where certificates
for Old Notes have been transmitted) specify the name in which such Old Notes
are registered, if different from that of the withdrawing holder. If
certificates for Old Notes have been delivered or otherwise identified to the
Exchange Agent, then, prior to the release of such certificates the withdrawing
holder must also submit the serial numbers of the particular certificates to be
withdrawn and a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution unless such holder is an Eligible Institution. If Old
Notes have been tendered pursuant to the procedure for book-entry transfer
described above, any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Old Notes and otherwise comply with the procedures of such facility.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Company whose determination
shall be final and binding on all parties. Any Old Notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
Exchange Offer. Any Old Notes which have been tendered for exchange but which
are not exchanged for any reason will be returned to the holder thereof without
cost to such holder (or, in the case of Old Notes tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry transfer procedures described above, such Old Notes
will be credited to an account with such Book-Entry Transfer Facility specified
by the holder) as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Old Notes may be
retendered by following one of the procedures described under "--Procedures for
Tendering Old Notes" above at any time on or prior to the Expiration Date.

EXCHANGE AGENT

Bankers Trust Company has been appointed as the Exchange Agent for the
Exchange Offer. All executed Letters of Transmittal should be directed to the
Exchange Agent at the addresses set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent addressed as follows:

Delivery To: Bankers Trust Company, Exchange Agent

BY MAIL: BY HAND:

BT Services Tennessee, Inc. Bankers Trust Company
Reorganization Unit Corporate Trust and Agency Group
P.O. Box 292737 Receipt & Delivery Window
Nashville, TN 37229-2737 123 Washington Street, 1st Floor
New York, NY 10006
For information, call:
(800) 735-7777
Confirm: (615) 835-3572
Fax: (615) 835-3701

27
<PAGE>

BY OVERNIGHT MAIL OR COURIER:

BT Services Tennessee, Inc.
Corporate Trust and Agency Group
Reorganization Unit
648 Grassmere Park Road
Nashville, TN 37211

DELIVERY OF A LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.

FEES AND EXPENSES

The Company will not make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offer.

The estimated cash expenses to be incurred in connection with the Exchange
Offer of approximately $150,000 will be paid by the Company.

ACCOUNTING TREATMENT

For accounting purposes, the Company will recognize no gain or loss as a
result of the Exchange Offer. The expenses of the Exchange Offer will be
amortized over the term of the Exchange Notes.

TRANSFER TAXES

Holders who tender their Old Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith, except that holders who instruct
the Company to register Exchange Notes in the name of, or request that Old
Notes not tendered or not accepted in the Exchange Offer be returned to, a
person other than the registered tendering holder will be responsible for the
payment of any applicable transfer tax thereon.

REGULATORY MATTERS

The Company is not aware of any governmental or regulatory approvals that are
required in order to consummate the Exchange Offer.

CONSEQUENCES OF FAILURE TO EXCHANGE

Participation in the Exchange Offer is voluntary. Holders of the Old Notes
are urged to consult their financial and tax advisors in making their own
decisions on what action to take. See "Certain United States Federal Income Tax
Considerations."

The Old Notes that are not exchanged for the Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Old Notes
may only be offered, sold, pledged or otherwise transferred (A)(i) to a person
whom the seller reasonably believes is a qualified institutional buyer within
the meaning of Rule 144A under the Securities Act ("Rule 144A") in a
transaction meeting the requirements of Rule 144A, (ii) in an offshore
transaction meeting the requirements of Rule 903 or Rule 904 of Regulation S
under the Securities Act, or (iii) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 thereunder (if available) and (B)
in accordance with all applicable securities laws of the states of the United
States. Under certain circumstances, the Company is required to file a Shelf
Registration Statement. See "Description of the Notes--Exchange Offer;
Registration Rights."

28
<PAGE>

PAYMENT OF ADDITIONAL INTEREST UPON REGISTRATION DEFAULT

In the event of a Registration Default (as hereinafter defined), additional
interest ("Liquidated Interest") will accrue on the Old Notes (in addition to
the stated interest on the Old Notes) from and including the date on which any
such Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. Liquidated Interest will be payable in
cash semiannually in arrears each April 1 and October 1, at a rate per annum
equal to 0.50% of the principal amount of the Old Notes during the 90-day
period immediately following the occurrence of any Registration Default and
shall increase by 0.25% per annum of the principal amount of the Old Notes at
the end of each subsequent 90-day period, but in no event shall such rates
exceed 2.00% per annum in the aggregate regardless of the number of
Registration Defaults. See "Description of the Notes--Exchange Offer;
Registration Rights."

USE OF PROCEEDS

The Company will not receive any proceeds from the issuance of the Exchange
Notes or the consummation of the Exchange Offer or any sale of Exchange Notes
to any broker-dealer.

29
<PAGE>

CAPITALIZATION

The following table sets forth as of March 31, 1997 (i) the historical
consolidated capitalization of the Company, and (ii) the pro forma
capitalization of the Company reflecting the application of net proceeds from
the sale of the Notes to repay certain existing long-term debt, borrowings
under the Company's revolving credit facility (after receipt of funds under
the GTE agreement) to repay all outstanding advances from the Company's
parent, payment of the Company's long-term debt from cash generated from
operations, and the capitalization as adjusted to reflect the foregoing and
the sale of 15,525,000 shares of Common Stock at $22.00 per share in the
Initial Public Offering and the application of the net proceeds therefrom.
This table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the
Consolidated Financial Statements and the notes thereto, appearing elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
----------------------
ACTUAL PRO FORMA
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Advances from parent............................... $ 27,952 $ --
Current portion of long-term debt.................. 24,859 15,815
---------- ----------
Total short-term debt.......................... $ 52,811 $ 15,815
========== ==========
Long-term debt..................................... $ 36,325 $ 1,213
Notes.............................................. 250,000 250,000
---------- ----------
Total long-term debt (excluding current
portion)...................................... 286,325 251,213
---------- ----------
Stockholder's equity:
Preferred stock, $.01 par value; 25,000,000
shares authorized; no shares issued and
outstanding..................................... -- --
Common stock, $.01 par value; 400,000,000 shares
authorized; 86,500,000 shares issued and
outstanding, actual; 102,025,000 shares issued
and outstanding pro forma(1).................... $ 865 $ 1,020
Additional paid-in capital....................... 55,027 374,781
Accumulated deficit.............................. (51,226) (51,226)
---------- ----------
Total stockholder's equity..................... 4,666 324,575
---------- ----------
Total capitalization......................... $ 290,991 $ 575,788
========== ==========
</TABLE>

- --------
(1) 10,000,000 of the authorized shares of Common Stock are reserved for
issuance under the Equity Incentive Plan, 2,000,000 of the authorized
shares of Common Stock are reserved for issuance under the Growth Share
Plan and 4,300,000 of the authorized shares of Common Stock are reserved
for issuance under the warrant issued to Anschutz Family Investment Company
LLC. See "Management--Equity Incentive Plan," "Management--Growth Share
Plan" and "Certain Transactions."

30
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
--------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Carrier services(1)(2)(3)............... $ 41,561 $ 53,064 $ 50,240 $ 67,789 $ 57,573 $ 18,493 $ 11,199
Commercial services..................... -- 969 8,712 20,412 34,265 7,013 9,411
--------- -------- -------- -------- -------- -------- --------
41,561 54,033 58,952 88,201 91,838 25,506 20,610
Network construction services(4)........ 11,751 15,294 11,921 36,901 139,158 9,126 52,083
--------- -------- -------- -------- -------- -------- --------
Total revenue......................... 53,312 69,327 70,873 125,102 230,996 34,632 72,693
--------- -------- -------- -------- -------- -------- --------
Operating expenses:
Telecommunications services............. 31,557 41,240 48,239 81,215 80,368 23,862 18,063
Network construction services........... 9,730 15,515 9,369 32,754 87,542 6,847 36,265
Selling, general and administrative(5).. 10,270 15,622 21,516 37,195 45,755 14,527 13,947
Growth share plan(6).................... 2,000 2,600 -- -- 13,100 -- 13,100
Depreciation and amortization........... 5,020 5,270 2,364 9,994 16,245 4,049 3,962
--------- -------- -------- -------- -------- -------- --------
Total operating expenses.............. 58,577 80,247 81,488 161,158 243,010 49,285 85,337
--------- -------- -------- -------- -------- -------- --------
Loss from operations...................... (5,265) (10,920) (10,615) (36,056) (12,014) (14,653) (12,644)
Gain on sale of contract rights(7)........ -- -- -- -- -- -- 7,710
Gain on sale of telecommunications service
agreements(2)............................ -- -- -- -- 6,126 -- --
Gain on sale of network(1)................ -- 126,521 -- -- -- -- --
Interest income (expense), net............ (2,687) (3,127) (28) (2,466) (4,373) (582) (304)
Other income (expense), net............... (610) (763) (42) 55 60 (54) (1,996)
--------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income taxes....... (8,562) 111,711 (10,685) (38,467) (10,201) (15,289) (7,234)
Income tax expense (benefit).............. (1,988) 43,185 (3,787) (13,336) (3,234) (5,310) (2,458)
--------- -------- -------- -------- -------- -------- --------
Net earnings (loss)....................... $ (6,574) $ 68,526 $ (6,898) $(25,131) $ (6,967) $ (9,979) $ (4,776)
========= ======== ======== ======== ======== ======== ========
Earnings (loss) per share(8).............. $ (0.07) $ 0.78 $ (0.08) $ (0.29) $ (0.08) $ (0.11) $ (0.05)
Weighted average number of shares
outstanding(8)........................... 88,158 88,158 88,158 88,158 88,158 88,158 88,158
OTHER FINANCIAL DATA:
EBITDA(9)................................. $ (855) $ (824) $ (6,338) $(26,007) $ 6,912 $ (9,059) $(10,678)
Net cash provided by (used in) operating
activities............................... $ 1,377 $ (7,125) $ 3,306 $(56,635) $ 32,524 $ (1,185) $ 33,359
Net cash provided by (used in) investing
activities............................... $ (11,202) $107,496 $(41,712) $(58,858) $(52,622) $(11,606) $(56,922)
Net cash provided by (used in) financing
activities............................... $ 11,549 $(95,659) $ 34,264 $113,940 $ 25,519 $ 15,904 $177,327
Capital expenditures(10).................. $ 11,000 $ 3,794 $ 40,926 $ 48,732 $ 85,842 $ 12,021 $ 78,922
Ratio of earnings to fixed charges(11).... -- 5.68 -- -- -- -- --
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF MARCH 31,
----------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equiva-
lents.................. $ 2,467 $ 7,179 $ 3,037 $ 1,484 $ 6,905 $ 4,597 $160,669
Property and equipment,
net.................... $34,628 $23,666 $63,009 $114,748 $186,535 $123,782 $231,228
Total assets............ $52,735 $60,754 $89,489 $184,178 $264,259 $189,238 $469,614
Long-
term debt, including
current portion........ $27,600 $ 2,141 $27,369 $ 90,063 $134,461 $ 84,032 $311,184
Total liabilities....... $51,482 $48,675 $64,908 $157,703 $254,817 $172,738 $464,948
Stockholder's equity.... $ 1,253 $12,079 $24,581 $ 26,475 $ 9,442 $ 16,500 $ 4,666
</TABLE>
- --------
(1) After deducting the carrying value of the assets sold and direct costs
associated with the 1993 Capacity Sale, the Company recognized a gain of
approximately $126.5 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business."
(2) In July 1996, the Company sold the telecommunications service agreements of
its dedicated line customer business on leased capacity to an unrelated
third party for $5.5 million and had received $4.5 million of the purchase
price in cash as of December 31, 1996. As a result of the sale, the Company
recognized a gain of approximately $6.1 million. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
(3) The Company acquired the Microwave System through its purchase of Qwest
Transmission Inc. in January 1995, and the acquired company contributed
$13.2 million to total revenue for the year ended December 31, 1995.
(4) In 1996, the Company entered into construction contracts for the sale of
dark fiber with Frontier and WorldCom whereby the Company agreed to sell
dark fiber along the route of the Qwest Network for a purchase price of
approximately $545.0 million. As a result of the activity under these
agreements, the Company recorded Network Construction Services revenue of
approximately $121.0 million in 1996 and approximately $49.0 million in the
three months ended March 31, 1997. See "Business--The Qwest Network--Dark
Fiber and High Volume Capacity Sales."
(5) Selling, general and administrative expenses include the following
nonrecurring expenses incurred by the Company: (i) $5.6 million in 1993 to
provide for the transfer of customers to leased capacity as a result of the
1993 Capacity Sale; (ii) $2.0 million in 1994 to relocate its corporate
headquarters from San Francisco to Denver and consolidate its
administrative functions in Denver; and (iii) $2.6 million in 1996 to
restructure its operations, including the direct sales group.
(6) Growth Share Plan expenses reflect compensation expense related to the
estimated increase in the value of the growth shares outstanding. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Management--Growth Share Plan" and note 15 to the
Consolidated Financial Statements of the Company.
(7) In March 1997, the Company sold certain contract rights related to the 1993
Capacity Sale for $9.0 million. As of March 31, 1997, the Company has
received $7.0 million in consideration and has reduced its liability for
associated costs by approximately $0.7 million. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
(8) Earnings (loss) per share and weighted average number of shares outstanding
are adjusted to reflect an increase in the authorized capital stock of
Qwest and a stock dividend of 86,490,000 shares effected prior to the
Offering.
(9) EBITDA represents net earnings (loss) before interest, income taxes,
depreciation and amortization, certain nonrecurring expenses described in
note 5 above, gain on sale of contract rights in 1997, gain on sale of
telecommunications service agreements in 1996 and gain on the 1993 Capacity
Sale (which are nonrecurring). EBITDA includes earnings from the
construction contracts for the sale of dark fiber that the Company will use
to provide cash for the construction cost of the Qwest Network. EBITDA does
not represent cash flow for the periods presented and should not be
considered as an alternative to net earnings (loss) as an indicator of the
Company's operating performance or as an alternative to cash flows as a
source of liquidity and may not be comparable with EBITDA as defined by
other companies. The Company believes that EBITDA is commonly used by
financial analysts and others in the telecommunications industry. Without
the effect of Growth Share Plan expense, EBITDA would have been $20.0
million, $1.8 million and $1.1 million for the years ended December 31,
1996, 1993 and 1992, respectively, and $2.4 million for the three months
ended March 31, 1997.
(10) Capital expenditures include expenditures for property and equipment,
accrued capital expenditures and initial obligations under capital leases.
(11) For purposes of calculating the ratio of earnings to fixed charges,
earnings consist of earnings (loss) before income taxes, plus fixed
charges excluding capitalized interest. Fixed charges consist of interest
expensed and capitalized, plus amortization of deferred financing costs,
plus the portion of rent expense under operating leases deemed by the
Company to be representative of the interest factor, plus preferred stock
dividends on preferred stock of QCC (increased to an amount representing
the pre-tax earnings which would be required to cover such dividend
requirements). The Company had a deficiency of earnings to fixed charges
of $8.9 million and $15.8 million in the three month periods ended March
31, 1997 and 1996, respectively, and $12.6 million, $40.3 million, $11.0
million and $14.5 million in 1996, 1995, 1994 and 1992, respectively.
Excluding the effect of the gains arising from the sale of contract rights
in 1997, telecommunications service agreements in 1996 and the 1993
Capacity Sale, the deficiency of earnings would have been $16.7 million in
the three month period ended March 31, 1997, and $18.7 million and $27.6
million in 1996 and 1993, respectively.

32
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
Company's audited Consolidated Financial Statements and unaudited interim
financial statements and the notes thereto, appearing elsewhere in this
Prospectus.

OVERVIEW

The Company provides communications services to interexchange carriers and
other telecommunications entities, businesses and consumers and constructs and
installs fiber optic communications systems for interexchange carriers and
other telecommunications entities, as well as for its own use. The Company is
expanding its existing long distance network into the Qwest Network, a coast-
to-coast, technologically advanced, fiber optic telecommunications network.
Management believes that the Qwest Network will position the Company to take
advantage of the rapidly growing demand for data transmission, multimedia and
long haul voice capacity.

Founded in 1988 as Southern Pacific Telecommunications Company, a subsidiary
of Southern Pacific Transportation Company ("Southern Pacific"), the Company
began operations by constructing fiber optic conduit systems along Southern
Pacific's railroad rights-of-way primarily for major long distance carriers in
exchange for cash and capacity rights. Since then, the Company has used its
construction operations as a platform to expand into the business of providing
telecommunications services. In 1995, the Company enhanced its ability to
provide telecommunications services by acquiring the Microwave System through
its purchase of Qwest Transmission Inc. for $18.8 million and by completing
and activating the Cal-Fiber system. The Company derives its revenue from
Carrier Services, Commercial Services and Network Construction Services.

Carrier Services. Carrier Services provide high volume and conventional
dedicated line services over the Company's owned capacity and switched
services over owned and leased capacity to interexchange carriers and other
telecommunications providers. The Company entered the Carrier Services market
in 1988 by marketing and providing dedicated line services to other carriers
using the long distance capacity that it had received under construction
contracts to build conduit systems principally for MCI. Through the
acquisition of a carrier's carrier in 1990, the Company increased its presence
in the Carrier Services market and expanded its geographic coverage of digital
dedicated line services to other long distance companies. The Company sold
substantially all of its owned capacity rights and related equipment in 1993
in exchange for $185.0 million and the right to use excess capacity free of
charge to provide service to its dedicated line customers for the twelve-month
period following the date of the sale (the "1993 Capacity Sale"). As a result
of this arrangement, the Company's cost of providing dedicated line services
to its carrier customers as a percentage of revenue was lower in 1994 than in
subsequent years. When this arrangement expired, the cost of providing
dedicated line services on a resale basis became substantially greater than
the cost of providing dedicated line services over the Company's owned
network. The Company sold its resale dedicated line services in July 1996 to
another long distance company, retaining primarily those dedicated line
customers it serviced on its owned network. As a result of this transaction,
the Company experienced a reduction in revenue in 1996 and the first three
months of 1997 compared with prior periods; however, the Company expects to
increase Carrier Services gross margins upon completion of segments of the
Qwest Network as additional owned capacity becomes available and the Company
expands its Carrier Services customer base through increased sales and
marketing efforts.

Revenues from Carrier Services are derived from high volume capacity
services, dedicated line services and switched services. The Company provides
high volume transmission capacity services through service agreements for
terms of one year or longer. Dedicated line services are generally offered
under service agreements for an initial term of one year. High volume capacity
service agreements and dedicated line service agreements generally provide for
"take or pay" monthly payments at fixed rates

33
<PAGE>

based on the capacity and length of circuit used. Customers are typically
billed on a monthly basis and also may incur an installation charge or certain
ancillary charges for equipment. After contract expiration, the contracts may
be renewed or the services may be provided on a month-to-month basis. Switched
services agreements are generally offered on a month-to-month basis and the
service is billed on a minutes-of-use basis. Revenues from carrier customers
that are billed on a minutes-of-use basis have the potential to fluctuate
significantly based on changes in usage that are highly dependent on
differences between the prices charged by the Company and its competitors. The
Company, however, has not experienced significant fluctuations to date. For
the three months ended March 31, 1997 and year ended December 31, 1996, the
Company's five largest carrier customers accounted for approximately 33.2% and
35.0% of Carrier Services revenue, respectively.

Commercial Services. Commercial Services provide long distance voice, data
and video services to businesses and consumers. The Company entered the
Commercial Services market in June 1993 by offering and selling switched
services principally to small- and medium-sized businesses using one switch
located in Dallas, Texas. The Company added switching capacity late in 1995
and during 1996 in Denver, Los Angeles, Tampa, and Indianapolis. The Company
anticipates adding more switching capacity to the Qwest Network as it becomes
operational and as minutes of traffic increase.

Revenue from Commercial Services is recognized primarily on a minutes-of-use
basis. The Commercial Services market is highly competitive and generally
subject to significant customer churn. The Company's churn rates vary by
product line and sales channel, and the Company typically has experienced an
average monthly churn rate ranging from 4% to 9%. The Company is implementing
various customer retention programs designed to reduce its churn rate, and
expects that such churn rate will decline as it builds brand identity and
increasingly targets high volume users. The average churn rate for the three
months ended March 31, 1997 has been consistent with historical rates. The
customer retention programs being implemented are not expected to have a
significant impact on operations prior to the fourth quarter of 1997.
Reductions in churn rates would lead to a reduction in selling expenses
related to account acquisition costs.

Network Construction Services. Network Construction Services consist of the
construction and installation of fiber optic communication systems for
interexchange carriers and other telecommunications providers, as well as for
the Company's own use. The Company began operations in 1988 constructing fiber
optic conduit systems primarily for major long distance carriers in exchange
for cash and capacity rights. In 1996, the Company entered into major
construction contracts for the sale of dark fiber to Frontier and WorldCom
whereby the Company has agreed to install and provide dark fiber to each along
the Qwest Network. The Company also entered into a substantial construction
contract with GTE in May 1997 for the sale of dark fiber. After completion of
the Qwest Network, the Company expects that revenues from Network Construction
Services will be less significant to the Company's operations. See "Business--
The Qwest Network--Dark Fiber Sales."

Revenues from Network Construction Services generally are recognized under
the percentage of completion method as performance milestones relating to the
contract are satisfactorily completed. Losses, if any, on uncompleted
contracts are expensed in the period in which they are identified and any
revisions to estimated profits on a contract are recognized in the period in
which they become known.

Pricing. The Company believes that prices in the telecommunication services
industry will continue to decline as a result of reforms prompted by the
Telecom Act of 1996 and reform of the rules governing access charges and
international settlement rates. The Company also believes that such decreases
in prices will be partially offset by increased demand for telecommunications
services, and that the low cost base of the Qwest Network will give it a
competitive advantage relative to its competitors.

Operating Expenses. The Company's principal operating expenses consist of
expenses for network construction incurred by Network Construction Services,
telecommunications services, selling,

34
<PAGE>

general and administrative ("SG&A"), compensation expenses associated with the
Company's Growth Share Plan and depreciation and amortization. Expenses for
Network Construction Services primarily consist of the costs attributable to
conduit and dark fiber construction contracts, including conduit, fiber cable,
construction crews and rights-of-way. These expenses have significantly
increased since 1994 primarily due to activity associated with a major
construction contract in 1995 and the Frontier and WorldCom construction
contracts in 1996 and the three months ended March 31, 1997. The Company
expects these expenses will continue to increase as the Company enters into
additional construction contracts for the sale of dark fiber along the Qwest
Network. Costs attributable to the construction of the Qwest Network for the
Company's own use are capitalized.

Expenses for telecommunications services primarily consist of the cost of
leased capacity, LEC access charges, engineering and operating costs. Since
the Company currently provides dedicated line services only over its own
network, the cost of providing these services generally does not include the
cost of leased capacity or LEC access charges. Expenses for switched services,
however, include these costs. The Company leases capacity from other carriers
to extend its switched services for originating and terminating traffic beyond
its own network boundaries. LEC access charges, which are variable, represent
a significant portion of the total cost for switched services. Due in part to
these costs, revenues from switched services have lower gross margins than
revenues from dedicated line services provided by the Company. When the Qwest
Network is completed and activated, the Company will be able to serve more
customer needs over its own capacity on the Qwest Network. Furthermore, with
additional switched traffic on the Qwest Network, the Company believes it will
realize economies of scale and thereby lower its cost of sales as a percentage
of revenue.

SG&A expenses include the cost of salaries, benefits, occupancy costs,
commissions, sales and marketing expenses and administrative expenses. In
March 1996, the Company changed the focus of its sales efforts for Commercial
Services from regional sales offices to agent and direct mail sales channels.
The Company redirected its sales efforts in order to reduce the fixed selling
expenses associated with having its own commercial sales offices and sales
employees and to concentrate on other sales channels that the Company believed
would be more cost effective in generating sales to the Company's target
market at that time. Notwithstanding the closure of its sales offices and
related cutbacks, SG&A expenses have continued to increase over the years,
which is consistent with the development of the network and the growth of the
Company's Carrier Services and Commercial Services.

The Company expects this trend to continue and that additional SG&A expenses
will be necessary to realize the anticipated growth in revenue for Carrier
Services and Commercial Services as the Company develops the Qwest Network.
The Company intends to open commercial sales offices in selected major
geographic markets to implement the Company's strategy, as segments of the
Qwest Network become operational. In addition, SG&A expenses will increase as
the Company continues to recruit experienced telecommunications industry
personnel to implement the Company's strategy. See "Management."

The Company has a Growth Share Plan for certain employees and directors of
Qwest, although the Company does not intend to grant any more growth shares
under that plan. See "Management--Growth Share Plan." Growth Share Plan
expenses reflect the Company's estimate of compensation expense for the shares
outstanding. Currently, growth shares granted under the Growth Share Plan
generally vest at the rate of 20% for each full year of service completed
after the grant date subject to risk of forfeiture. Participants receive their
vested portion of the increase in value of the growth shares upon a triggering
event, as defined, which includes the end of a growth share performance cycle
and, with respect to certain growth shares, an initial public offering. Upon
completion of the Initial Public Offering, certain growth shares vested in
full, which will result in substantial compensation expense under the Growth
Share Plan in the second quarter of 1997. The actual compensation expense
accrual will depend upon the average trading price of the shares of Common
Stock over the five trading day period beginning June 24, 1997. The Company
estimates, based on an assumed average trading price per share of Common Stock
of $28.89 (which was the average for the four trading days beginning June 24,
1997 and ending June 27, 1997), that the additional compensation expense
accrual in the second

35
<PAGE>

quarter of 1997 would be up to $71.0 million. In addition, as described in
"Management--Growth Share Plan," the number of shares of Common Stock issued
to holders of growth shares in payment therefor would be reduced by certain
elections by them for tax withholdings and cash payments. If the holders
elected the maximum withholdings and payments, up to $32 million of the
accrued compensation would be payable in cash by the Company. Compensation
relating to certain nonvested growth shares will be amortized as expense over
the remaining approximately four and one-half year vesting period. See
"Management--Growth Share Plan."

RESULTS OF OPERATIONS

The table set forth below summarizes the Company's percentage of revenue by
source and operating expenses as a percentage of total revenues:

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------- ----------------
1992 1993 1994 1995 1996 1996 1997
----- ----- ----- ----- ----- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Carrier services........ 78.0% 76.5% 70.9% 54.2% 24.9% 53.4% 15.4%
Commercial services..... -- 1.4 12.3 16.3 14.8 20.2 12.9
----- ----- ----- ----- ----- ------- -------
78.0 77.9 83.2 70.5 39.7 73.6 28.3
Network construction
services............... 22.0 22.1 16.8 29.5 60.3 26.4 71.7
----- ----- ----- ----- ----- ------- -------
Total revenue........... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Operating Expenses:
Telecommunications
services................ 59.2% 59.5% 68.1% 64.9% 34.8% 68.9% 24.8%
Network construction
services................ 18.3 22.4 13.2 26.2 37.9 19.8 49.9
Selling, general and
administrative.......... 19.2 22.5 30.4 29.7 19.8 41.9 19.2
Growth Share Plan........ 3.8 3.8 -- -- 5.7 -- 18.0
Depreciation and
amortization............ 9.4 7.6 3.3 8.0 7.0 11.7 5.5
----- ----- ----- ----- ----- ------- -------
Total operating
expenses................ 109.9% 115.8% 115.0% 128.8% 105.2% 142.3% 117.4%
</TABLE>

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31,
1996

The Company experienced a net loss of $4.8 million in the three months ended
March 31, 1997 compared to a net loss of $10.0 million in the three months
ended March 31, 1996. Excluding the effect of the compensation expense
relating to the Growth Share Plan, net of income tax, the Company's reported
net income would have been approximately $3.7 million for the three months
ended March 31, 1997 as compared to a net loss of $10.0 million for the three
months ended March 31, 1996.

Revenue. Total revenue increased $38.1 million, or 109.9%, to $72.7 million
in the three months ended March 31, 1997 from $34.6 million in the three
months ended March 31, 1996 due primarily to significantly higher revenue from
Network Construction Services, as well as increased revenue from Commercial
Services, offset in part by lower revenue from Carrier Services. Revenue from
Network Construction Services increased $43.0 million, or 470.7%, to $52.1
million in the three months ended March 31, 1997 from $9.1 million in the
three months ended March 31, 1996. The increase was due primarily to network
construction revenue from dark fiber sales of approximately $48.9 million to
WorldCom and Frontier, compared with $6.5 million in the three months ended
March 31, 1996. Commercial Services revenue increased $2.4 million, or 34.2%,
to $9.4 million in the three months ended March 31, 1997 from $7.0 million in
the three months ended March 31, 1996 due primarily to growth in switched
services provided to small- and medium-sized businesses and consumers as a
result of the expansion of the Company's agent, telemarketing and direct mail
sales channels. Carrier Services revenue decreased $7.3 million, or 39.4%, to
$11.2 million in the three months ended March 31, 1997 from $18.5 million in
the three months ended March 31, 1996. The decrease was due primarily to the
Company's sale of its resale dedicated line services on leased capacity on
July 1, 1996, which had generated revenues of $9.7 million for the three
months ended March 31, 1996. The decrease in Carrier Services revenue was
partially offset by an increase in revenue from carrier switched services,
which increased to $4.3 million in the three months ended March 31, 1997 from
$3.0 million in the three months ended March 31, 1996.

36
<PAGE>

Operating Expenses. Total operating expenses increased $36.0 million, or
73.2%, to $85.3 million in the three months ended March 31, 1997 from $49.3
million for the three months ended March 31, 1996 due primarily to increases
in Network Construction Services and Growth Share Plan expense, partially
offset by lower telecommunications services expenses and SG&A expenses.

Expenses for Network Construction Services increased $29.4 million, or
429.6%, to $36.3 million in the three months ended March 31, 1997 from $6.8
million in three months ended March 31, 1996 due to cost of construction
contracts relating to dark fiber sales. Expenses for telecommunications
services decreased $5.8 million, or 24.3%, to $18.1 million in the three
months ended March 31, 1997 from $23.9 million in the three months ended March
31, 1996. The sale on July 1, 1996 of the Company's dedicated line services on
leased capacity resulted in a reduction in expenses, which was partially
offset by telecommunications services expenses associated with the growth in
switched services and servicing the Qwest Network.

SG&A expenses decreased $0.6 million, or 4.0%, to $13.9 million in the three
months ended March 31, 1997 from $14.5 million in the three months ended March
31, 1996. The decrease was due primarily to restructuring expenses of $1.6
million incurred by the Company in March 1996 as a result of its decision to
close 13 sales offices and the termination of approximately 130 employees. As
a result of this restructuring, the Company experienced a reduction in
payroll, commissions, and rental expense. These costs were partially offset by
increased payroll attributable to the headcount growth in support of the
construction of the Qwest Network and to costs associated with the hiring of
senior management. See "Management." Costs for sales commissions on higher
commercial revenue and expenses for telemarketing and promotions also
increased from the three months ended March 31, 1996 to the three months ended
March 31, 1997. The Company anticipates that as it deploys the Qwest Network
and expands its Carrier Services and Commercial Services, SG&A expenses will
continue to increase.

Under the Growth Share Plan, the Company has estimated an increase in the
value of the growth shares at March 31, 1997 and has recorded approximately
$13.1 million of additional compensation expense in the three months ended
March 31, 1997, none of which has been paid. No expense was recognized in the
three months ended March 31, 1996, as there was no compensatory element in
that period.

The Company's depreciation and amortization expense remained substantially
unchanged in the three months ended March 31, 1997 as compared to the three
months ended March 31, 1996. The Company expects that depreciation and
amortization expense will increase in subsequent periods as the Company
continues to construct and activate the Qwest Network.

Interest and Other Income (Expense). Pursuant to the 1993 Capacity Sale, the
Company obtained certain rights of first refusal to re-acquire network
communications equipment and terminal locations including leasehold
improvements should the purchaser sell the network. In March 1997, the Company
sold certain of these rights in return for $9.0 million and the right to re-
acquire certain terminal facilities. As of March 31, 1997, the Company had
received $7.0 million in cash consideration and was released from an estimated
liability of $0.7 million, net of $0.1 million of other expenses, which
related to its agreement to relocate certain terminal facilities. The gain
recorded in the three months ended March 31, 1997 was $7.7 million. The
remaining cash consideration of $2.0 million was paid in May 1997 when the
Company completed delivery of certain telecommunications capacity to the
purchaser.

As previously discussed, the Company sold its resale dedicated line services
in July 1996. During the transition of the service agreements to the buyer,
the Company incurred certain facilities costs on behalf of the buyer, which
were to be reimbursed to the Company. A dispute arose in the three months
ended March 31, 1997 with respect to the reimbursement of such costs and in
connection therewith, the Company has made a provision of approximately $2.0
million.

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<PAGE>

The Company's net interest and other expenses increased $1.7 million, to
$2.3 million in the three months ended March 31, 1997 from $0.6 million in the
three months ended March 31, 1996. This increase was primarily attributable to
the provision for transition service costs described in the previous
paragraph.

Income Taxes. The Company is included in the consolidated federal income tax
return of Anschutz Company, and a tax sharing agreement, as amended, provides
for allocation of tax liabilities and benefits to the Company, in general, as
though it filed a separate tax return. The Company's effective tax rate in the
three months ended March 31, 1997 and the three months ended March 31, 1996
approximated the statutory federal rate.

Net Loss. The Company experienced a net loss of $4.8 million in the three
months ended March 31, 1997 compared to a net loss of $10.0 million in the
three months ended March 31, 1996 as a result of the factors discussed above.
Excluding the effect of the compensation expense relating to the Growth Share
Plan, net of income tax, the Company's net income would have been
approximately $3.7 million for the three months ended March 31, 1997.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Revenue. Total revenue increased $105.9 million, or 84.7%, to $231.0 million
in 1996 from $125.1 million in 1995 due primarily to significantly higher
revenue from Network Construction Services, as well as increased revenue from
Commercial Services, offset in part by lower revenue from Carrier Services.
Revenue from Network Construction Services increased $102.3 million, or
277.1%, to $139.2 million in 1996 from $36.9 million in 1995 due to network
construction revenue from dark fiber sales of approximately $121.0 million to
WorldCom and Frontier. Commercial Services revenue increased $13.9 million, or
67.9%, to $34.3 million in 1996 from $20.4 million in 1995. This increase is
largely attributable to growth in switched services provided to small- and
medium-sized businesses and consumers as a result of the expansion of the
Company's agent, telemarketing and direct mail sales channels. Carrier
Services revenue decreased $10.2 million, or 15.1%, to $57.6 million in 1996
from $67.8 million in 1995 primarily due to decreases in revenue resulting
from the Company's sale of a portion of its dedicated line services on leased
capacity on July 1, 1996. The sold business generated revenues of $18.8
million for the six months ended June 30, 1996 and $39.7 million for the year
ended December 31, 1995. The decrease in Carrier Services revenue was
partially offset by an increase in revenue from carrier switched services,
which increased to $19.4 million in 1996 from $13.8 million in 1995.

Operating Expenses. Total operating expenses increased $81.9 million, or
50.8%, to $243.0 million in 1996 from $161.2 million in 1995 due primarily to
increases in Network Construction Services, SG&A and compensation expenses
associated with the Growth Share Plan. Expenses for telecommunications
services decreased $0.8 million, or 1.0%, to $80.4 million in 1996 from $81.2
million in 1995. The sale on July 1, 1996 of the Company's dedicated line
services on leased capacity generated a reduction in expenses, which was
partially offset by telecommunications services expenses associated with the
growth in switched services and servicing the Qwest Network. Expenses for
Network Construction Services increased $54.8 million, or 167.3%, to $87.5
million in 1996 from $32.8 million in 1995. This increase was due to cost of
construction contracts relating to dark fiber sales.

SG&A expenses increased $8.6 million, or 23.0%, to $45.8 million in 1996
from $37.2 million in 1995. The Company incurred additional SG&A expenses as a
result of growth in the Company's telecommunications services and the
construction of the Qwest Network, including additional sales commissions on
higher revenue, expenses incurred in the implementation of the Company's
direct mail sales channel and expenses for customer service personnel added to
support the Company's expansion of its commercial customer base. The SG&A
expenses in 1996 also included restructuring

38
<PAGE>

expenses of $1.6 million incurred by the Company as a result of its decision
to close 13 sales offices and the termination of approximately 130 employees
involved in sales, marketing and administrative functions. As a result of this
restructuring, the Company experienced a reduction in payroll, commissions and
rental expense. The Company anticipates that as it deploys the Qwest Network
and expands its Carrier Services and Commercial Services, SG&A expenses will
continue to increase.

Under the Growth Share Plan, the Company estimated a $13.1 million increase
in value of the growth shares at December 31, 1996, due to the Frontier dark
fiber sale. No expense was recognized for the year ended December 31, 1995, as
there were no significant compensatory elements in those periods.

The Company's depreciation and amortization expense increased $6.3 million,
or 62.5%, to $16.2 million in 1996 from $10.0 million in 1995. This increase
was primarily due to the Company's investment in the Qwest Network. The
Company expects that depreciation and amortization expense will continue to
increase in subsequent periods as the Company continues to invest in the Qwest
Network.

Interest and Other Income (Expense). The Company's net interest and other
expenses increased $1.9 million, or 78.9%, to $4.3 million in 1996 from $2.4
million in 1995. This increase was primarily attributable to additional debt
incurred in 1996 to finance capital expenditures and to provide working
capital.

Income Taxes. The Company is included in the consolidated federal income tax
return of Anschutz Company, and a tax sharing agreement provides for
allocation of tax liabilities and benefits to the Company, in general, as
though it filed a separate tax return. The Company's effective tax rate in
1996 and 1995 approximated the statutory federal rate. The difference between
the income tax benefit of $13.3 million in 1995 compared to $3.2 million
benefit in 1996 resulted from a $28.3 million decrease in loss before income
tax benefit from $38.5 million in 1995 to $10.2 million in 1996.

Net Loss. The Company experienced a net loss of $7.0 million in 1996
compared to a net loss of $25.1 million in 1995 as a result of the factors
discussed above.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Revenue. Total revenue increased $54.2 million, or 76.5%, to $125.1 million
in 1995 from $70.9 million in 1994 due to growth in revenue in each of the
three services provided by the Company. Revenue from Carrier Services
increased $17.5 million, or 34.9%, to $67.8 million in 1995 from $50.2 million
in 1994 primarily as a result of the Company's acquisition of the Microwave
System, which contributed $13.2 million in revenue in 1995. Commercial
Services revenue increased $11.7 million, or 134.3%, to $20.4 million in 1995
from $8.7 million in 1994 due to increased business arising from the Company's
marketing efforts. Revenue from Network Construction Services increased $25.0
million, or 209.5%, to $36.9 million in 1995 from $11.9 million in 1994,
primarily due to increased revenue under a contract with MCI for the
construction of fiber optic conduit routes.

Operating Expenses. Total operating expenses increased $79.7 million, or
97.8%, to $161.2 million in 1995 from $81.5 million in 1994. Expenses for
telecommunications services increased $33.0 million, or 68.4%, to $81.2
million in 1995 from $48.2 million in 1994 primarily due to increased costs of
providing long distance and dedicated line services associated with growth in
volume and the expiration of free leased capacity under the facility agreement
related to the 1993 Capacity Sale, partially offset by savings derived from
transferring dedicated line services customers from leased capacity to the
Cal-Fiber system. Expenses for Network Construction Services increased $23.4
million, or 249.6%, to $32.8 million in 1995 compared to $9.4 million in 1994.
The increase in operating expenses was due in large part to increased
construction activity under a contract with MCI for the construction of
conduit routes.

39
<PAGE>

SG&A expenses increased $15.7 million, or 72.9%, to $37.2 million in 1995
from $21.5 million in 1994. This increase was primarily attributable to the
expansion in the Company's sales and marketing efforts and an increase in
administrative expenses due to the expansion of the Company's administrative
organization to support the growth in revenue.

Depreciation and amortization expense increased $7.6 million, or 322.8%, to
$10.0 million in 1995 from $2.4 million in 1994 primarily due to the
investment in the Microwave System and the Cal-Fiber system becoming fully
operational in early 1995.

Interest and Other Income (Expense). The Company's net interest and other
expenses increased $2.3 million to $2.4 million in 1995 from $0.1 million in
1994 as a result of additional debt incurred in 1995 to finance the
acquisition of the Microwave System and the interest charges related to
financing the Cal-Fiber system. Interest charges related to the Cal-Fiber
system were capitalized during the construction period, which was completed in
February 1995.

Net Loss. The Company experienced a net loss of $25.1 million in 1995
compared to a net loss of $6.9 million in 1994 as a result of the factors
discussed above.

LIQUIDITY AND CAPITAL RESOURCES

From 1994 through the three months ended March 31, 1997, the Company has
funded capital expenditures, debt service and cash used in operations through
a combination of stockholder advances, capital contributions and external
borrowings supported by collateral owned by its parent or affiliates, as well
as external borrowings collateralized by certain of the Company's assets. The
Company intends to finance its operations in the future through internally
generated and external funds without relying on cash advances, contributions
or guarantees from its parent.

The Company's operations generated insufficient cash flows from 1994 through
the three months ended March 31, 1997 to enable it to meet its capital
expenditures, debt service and other cash needs. Total cash expended from
January 1, 1994 to March 31, 1997 to fund capital expenditures, repayments of
long-term debt to third parties, and the acquisition of the Microwave System
was approximately $208.3 million, $117.1 million and $12.5 million,
respectively. Total cash provided by operations was approximately $12.6
million during the same period. Total cash provided during this same period by
loans secured by collateral owned by its parent or an affiliate and capital
contributions from its parent were approximately $80.0 million and $48.9
million, respectively. In addition, during this same period, the Company's net
cash provided by secured borrowings under long-term debt agreements with third
parties aggregated $93.0 million. As of March 31, 1997, the Company had
positive working capital of $58.6 million. At December 31, 1996, 1995 and
1994, the Company had working capital deficits of approximately $69.4 million,
$2.6 million and $11.9 million, respectively.

On June 27, 1997, the Company received approximately $320.0 in net proceeds
from the sale of 15,525,000 shares of Common Stock in the Initial Public
Offering.

In March 1997, the Company issued and sold $250.0 million in principal
amount of its Old Notes, the proceeds of which were used, as indicated below,
to repay certain indebtedness of the Company and also to fund capital
expenditures for the construction and activation of the Qwest Network.
Unamortized issuance costs totaling approximately $8.2 million are being
amortized over the term of the Notes. Interest on the Notes is payable semi-
annually on April 1 and October 1 of each year, commencing on October 1, 1997,
and the principal amount of the Notes is due and payable in full on

40
<PAGE>

April 1, 2007. The Indenture contains certain covenants that, among other
things, limit the ability of the Company and certain of its subsidiaries (the
"Restricted Subsidiaries") to incur additional indebtedness and issue
preferred stock, pay dividends or make other distributions, repurchase capital
stock or subordinated indebtedness, create certain liens, enter into certain
transactions with affiliates, sell assets of the Company or its Restricted
Subsidiaries, issue or sell capital stock of the Company's Restricted
Subsidiaries or enter into certain mergers and consolidations. In addition,
under certain limited circumstances, the Company will be required to offer to
purchase the Notes at a price equal to 100% of the principal amount thereof
plus accrued and unpaid interest to the date of purchase with the excess
proceeds of certain asset sales. In the event of a Change of Control (as
defined in the Indenture), holders of the Notes will have the right to require
the Company to purchase all of their Notes at a price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest.
Generally, the Notes are redeemable, at the option of the Company, at stated
premiums over par on or after April 1, 2002, and up to 35% of the Notes may be
redeemed at a premium over par prior to April 1, 2000 with the proceeds of
certain public stock offerings.

In connection with the sale of the Old Notes, the Company agreed to make an
offer to exchange the Exchange Notes, registered under the Securities Act and
with terms identical in all material respects to the Old Notes, for the Old
Notes or, alternatively, to file a shelf registration statement under the
Securities Act with respect to the Old Notes. If the registration statement
for the exchange offer or the shelf registration statement, as applicable, are
not filed or declared effective within specified time periods or, after being
declared effective, cease to be effective or usable for resale of the Notes
during specified time periods (each a "Registration Default"), additional
interest will accrue at a rate per annum equal to 0.50% of the principal
amount of the Old Notes during the 90-day period immediately following the
occurrence of a Registration Default and increasing in increments of 0.25% per
annum, up to a maximum of 2.0% per annum, at the end of each subsequent 90-day
period until the Registration Default is cured. See "Description of the
Notes."

In June 1994, the Company entered into a $27.6 million network credit
facility to finance the construction of the Cal-Fiber system. The loan was
scheduled to mature on the last business day of July 2001. At March 31, 1997,
the outstanding principal balance of the facility was $26.0 million, which was
subsequently repaid in full with a portion of the proceeds of the sale of the
Notes.

In April 1995, the Company entered into a secured construction loan facility
with Bank of Nova Scotia used to fund certain conduit installation projects.
Borrowings under the facility are secured by certain construction contracts
and notes payable to the Company. The facility converted into term loans, with
$4.1 million maturing November 27, 1997 and $10.9 million maturing February
27, 1998. Borrowings bear interest at the Company's option at either: (i) the
higher of a floating base rate announced by the lender or the federal funds
rate plus one half of one percent plus an applicable margin; or (ii) LIBOR
plus an applicable margin. At March 31, 1997, the outstanding principal
balance was $15.0 million.

In 1992, 1995 and 1996, the Company entered into equipment loans totalling
$12.6 million, with final maturity dates ranging from September 2000 to
October 2001. At March 31, 1997, the aggregate principal amount outstanding
under these equipment loans was $9.3 million, all of which has been repaid
with a portion of the proceeds of the sale of the Notes.

In July 1995, the Company issued two term notes totaling $12.0 million,
which were scheduled to mature on September 30, 2000. At March 31, 1997, the
outstanding principal amount under these notes was $8.9 million, which was
subsequently repaid in full with a portion of the proceeds of the sale of the
Notes.

In April 1996, the Company entered into a $100.0 million three-year
revolving credit facility, as amended in September 1996, that converts to a
two-year term loan maturing on April 2, 2001. On

41
<PAGE>

March 31, 1997, the Company paid down the $80.0 million balance under this
facility with a portion of the proceeds of the sale of the Notes. In February
1997, the Company entered into a one-year $50.0 million line of credit from a
commercial bank. At March 31, 1997, no amounts were outstanding under this
credit line. These credit facilities are collateralized by a pledge of
publicly traded stock owned by an affiliate of Anschutz Company. In May 1997
(following receipt of funds under the GTE agreement), the Company borrowed
$28.0 million under the $100.0 million facility and used this amount to repay
all outstanding advances from the Company's parent, the proceeds of which were
used to fund network construction, capital expenditures and working capital.
The outstanding balance under the facility was repaid with cash generated from
operations.

The Company intends to terminate the latter two existing credit facilities
totalling $150.0 million as soon as practicable after completion of the
Initial Public Offering. The Company intends to obtain new bank credit
facilities of lesser amount, which may be secured or unsecured, as permitted
under the Indenture. The Company is in discussions with various potential
lenders in this regard. The Company also may issue other public or private
debt. No credit support will be provided by the Company's parent for any new
credit facilities. No assurance can be given as to when or whether the Company
will be able to obtain new credit facilities on acceptable terms.

In May 1997, the Company and Nortel, individually and as agent for itself
and other specified lenders, entered into a $90.0 million credit agreement to
finance the transmission electronics equipment to be purchased from Nortel
under a procurement agreement. Under and subject to the conditions contained
in the credit agreement, the Company may borrow funds as it purchases the
equipment to fund up to 75% of the purchase price of such equipment and
related engineering and installation services provided by Nortel, with the
purchased equipment and related items serving as the collateral for the loans.
Principal amounts outstanding under the credit agreement will be payable in
quarterly installments commencing on June 30, 2000, with repayment in full due
and payable on March 31, 2004. Borrowings will bear interest at the Company's
option at either (i) a floating base rate announced by a designated reference
bank plus an applicable margin or (ii) LIBOR plus an applicable margin.

Following the Initial Public Offering, the Company will remain highly
leveraged. As of March 31, 1997, the Company had, on a consolidated basis,
approximately $339.1 million in principal amount of indebtedness outstanding.
The Indenture and certain debt instruments to which Qwest's subsidiaries are
parties limit but do not prohibit the incurrence of additional indebtedness by
the Company, and the Company expects that Qwest or its subsidiaries may incur
additional indebtedness in the future. See "Capitalization" and "Risk
Factors--High Leverage; Ability to Service Indebtedness."

During the three months ended March 31, 1997 and the years ended December
31, 1996, 1995 and 1994, capital expenditures, including accrued capital
expenditures and assets held under capital leases, of the Company totaled
$78.9 million, $85.8 million, $48.7 million and $40.9 million, respectively.
These expenditures were funded principally through project financing and other
external borrowings and, beginning in the fourth quarter of 1994, also through
advances and capital contributions from Anschutz Company and earnings from
contracts relating to dark fiber sales.

The Company estimates the total cost to construct and activate the Qwest
Network and complete construction of the dark fiber sold to Frontier, WorldCom
and GTE will be approximately $1.4 billion. Of this amount, the Company had
already expended approximately $400.0 million as of May 31, 1997. The Company
anticipates remaining total cash outlays for these purposes of approximately
$500.0 million in 1997 and $500.0 million in 1998. Estimated total
expenditures for 1997 include the Company's commitment to purchase a minimum
quantity of fiber for approximately $257.0 million (subject to quality and
performance specifications), of which approximately $100.0 million had been
expended as of May 31, 1997. Estimated total expenditures for 1997 and 1998
together also include

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$100.0 million for the purchase of electronic equipment. In addition, the
Company anticipates approximately $97.0 million of capital expenditures in
1997 and 1998 to support growth in Carrier Services and Commercial Services.

As of the date of this Prospectus, the Company has obtained the following
sources of funds to complete the build-out: (i) approximately $1.0 billion
under the Frontier, WorldCom and GTE contracts and additional smaller
construction contracts for sales of dark fiber, of which approximately $286.0
million had already been paid and $733.0 million remained to be paid at May
31, 1997; (ii) $90.0 million of vendor financing; (iii) $117.8 million in net
proceeds from the sale on March 31, 1997 of $250.0 million in principal amount
of the Notes remaining after repayment of certain existing debt; and (iv)
approximately $320.0 million in net proceeds from the Initial Public Offering.
The Company believes that these sources of cash will be sufficient to satisfy
its anticipated cash requirements at least through the end of 1997.

With the completion of the 13,000 route mile network, Qwest will provide
services nationally to its customers primarily over its own facilities, using
leased facilities in those portions of the country not covered by the Qwest
Network. Qwest will continue to evaluate the economics of extending its core
network versus continuing to lease network capacity. In this regard, the
Company is considering extensions in the Southeast United States, the
California Valley and, perhaps, the Pacific Northwest. The Company has made no
final decision in this regard, and any decisions would be dependent, among
other things, upon the Company's assesment of the potential for dark fiber
sales or long-term leases of high volume capacity and the availability of
additional capital on acceptable terms.

IMPACT OF INFLATION

Inflation has not significantly affected the Company's operations during the
past three years.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

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INDUSTRY OVERVIEW

GENERAL

The telecommunications industry involves the transmission of voice, data and
video communications from the point of origination to the point of
termination. The industry has been undergoing rapid change due to
deregulation, the construction of additional infrastructure and the
introduction of new technologies, which has resulted in increased competition
and demand for telecommunications services.

United States Domestic Long Distance. The structure of the domestic long
distance telecommunications industry was strongly influenced by a 1982 court
decree that required the divestiture by AT&T of its seven RBOCs and divided
the country into approximately 200 LATAs that range in size from metropolitan
areas to entire states. The seven RBOCs were initially limited to providing
local telephone service, access to long distance carriers and "in-region" long
distance service (service within a LATA). The right to provide inter-LATA
service was initially ceded to AT&T and other long distance carriers, as well
as to LECs other than the RBOCs. However, under the Telecom Act of 1996, the
RBOCs may now provide inter-LATA long distance service, subject to certain
conditions. See "Regulation--General Regulatory Environment."

For each long distance call, the originating and terminating LECs charge the
long distance carrier an access fee to carry the call across their local
networks. The long distance carrier charges the customer a fee for its
transmission of the call, a portion of which consists of the access fees
charged by the originating and terminating LECs. To encourage the development
of competition in the long distance market, the LECs are required to provide
all long distance carriers with access to local exchange service that is
"equal in type, quality and price" to that provided to AT&T. These "equal
access" and related provisions were intended to prevent preferential treatment
of AT&T and to require that the LECs charge the same access fees to all long
distance carriers, regardless of their volume of traffic. These provisions,
along with the development and evolution of fiber optic technology with its
increased capacity and transmission quality, have helped smaller long distance
carriers emerge as alternatives to the largest companies for long distance
telecommunications services. See "Regulation--General Regulatory Environment."

United States International Long Distance. The United States international
long distance industry is large and growing. The onset of competition gave
rise to deregulation and a decrease in prices, which led to the initial growth
in the market and improvements in service offerings and customer service.
Subsequent growth has been largely attributable to the worldwide trend toward
deregulation and privatization, technological improvements, the expansion of
telecommunications infrastructure and the globalization of the world's
economies.

The profitability of the United States international long distance market is
principally driven by the difference between settlement rates (i.e., the rates
paid to other carriers to terminate an international call) and billed revenue.
The difference in cost between providing domestic long distance and
international service is minimal, and increased worldwide competition has
already brought about certain reductions in settlement rates and end user
prices, thereby reducing overseas termination costs for United States-based
carriers. However, it is believed that certain foreign countries use
settlement rates to subsidize their domestic call rates, contributing to
significantly higher rates for certain international calls compared to
domestic long distance calls. The FCC has proposed measures intended to
overhaul the system of international settlements, although such proposals have
not yet been enacted and remain subject to modification or appeal to the
courts or both. Additionally, recent worldwide trade negotiations may lead to
reduced settlement rates. See "Regulation--General Regulatory Environment."

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Multimedia. Continuing developments in multimedia applications are bringing
new entrants to the telecommunications market. Internet service providers and
cable television, entertainment and data transmission companies, for instance,
are potential customers for voice, data and video communications over high
bandwidth networks such as the Qwest Network.

LONG DISTANCE NETWORK SERVICES

Switched voice and data services originate and terminate with end users and
require varying amounts of bandwidth, depending on the nature of the
communication. Traditional telephony services such as "1 Plus" dialing require
only limited bandwidth (such as 64 Kbps). Emerging broadband services, such as
the Internet, private networks and multimedia applications, require higher
bandwidth for effective communication. Such services are increasingly
transmitted over SONET ring-protected Optical Carrier level paths (such as OC-
48 or OC-192) using advanced transmission protocols, such as Frame Relay and
ATM.

The following diagram illustrates the typical layout of a broadband services
network.

[LOGO OF BROADBAND SERVICES NETWORK APPEARS HERE]

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TELECOMMUNICATIONS TECHNOLOGY

The market for video, voice and data communications is served primarily
through fiber optic and coaxial copper cables, microwave systems and
satellites. Before the 1980s, telecommunications traffic generally was
transmitted through satellites, microwave radio or copper cable installed
undersea or buried in the ground. By 1990, copper cable had been largely
replaced by fiber optic systems that provided greater capacity at lower cost
with higher quality and reliability.

. Fiber Optic Systems. Fiber optic systems use laser-generated light to
transmit voice, data and video in digital format through ultra-thin
strands of glass. Fiber optic systems are characterized generally by
large circuit capacity, good sound quality, resistance to external signal
interference and direct interface to digital switching equipment or
digital microwave systems. A pair of modern fiber optic strands, using
the most advanced technology commercially available, is capable of
carrying OC-192 level capacity, equal to over 129,000 simultaneous
telephone calls. Because fiber optic signals disperse over distance, they
must be regenerated/amplified at sites located along the fiber optic
cable. Fiber optic systems using earlier generation fiber, as compared to
the more advanced fiber being installed in the Qwest Network, require
frequent intervals between regeneration/amplifier sites, typically
between 20 and 45 miles. The Company's advanced fiber allows for greater
distances between regeneration/amplifier sites, and the Qwest Network is
designed to use a maximum of 60-mile intervals. Greater distances between
regeneration/amplifier sites generally translate into substantially lower
installation and operating costs.

. Microwave Systems. Although limited in capacity compared with fiber optic
systems, digital microwave systems (such as the Company's Microwave
System) offer an effective and reliable means of transmitting lower
volume and narrower bandwidths of voice, data and video signals.
Generally no more than 21 DS-3s can be transmitted by microwave between
two antennae. Microwaves are very high frequency radio waves that can be
reflected, focused and beamed in a line-of-sight transmission path.
Because of their electro-physical properties, microwaves can be used to
transmit signals through the air, with relatively little power, in much
the same way that electrical signals are transmitted through a copper
wire. To create a communications circuit, microwave signals are
transmitted through a focusing antenna, received by an antenna at the
next station in the network, then amplified and retransmitted. Microwaves
disperse as they travel through the air, and as a result this
transmission process must be repeated at repeater stations, which consist
of radio equipment, antennae and back-up power sources, located on
average every 22 miles along the transmission network.

. Satellite Systems. Although satellites initially were used for point-to-
point long distance telephone and television transmissions, fiber optic
cables have proven to be a more cost effective delivery method for high
volume point-to-point applications. Currently, satellites are primarily
used for transmissions that must reach many locations over vast distances
simultaneously, such as the distribution of television programming, for
point-to-point traffic in developing countries lacking terrestrial
networks and for other point-to-point traffic that cannot be connected
efficiently or cost-effectively by terrestrial transmission systems.

TELECOMMUNICATIONS MARKETS

Companies in the domestic long distance market generated estimated total
revenue of $72 billion in 1995. AT&T is the dominant long distance carrier
with an estimated 53% of total market revenue in 1995, while MCI and Sprint
held the number two and three market positions with approximately 17.8% and
10% of 1995 market revenues, respectively. These three carriers, together with
WorldCom, constitute what are generally referred to as the "Tier 1" companies
in the long distance market.

Long distance companies may generally be categorized as "facilities-based"
carriers and "nonfacilities-based" carriers. The four Tier 1 companies are
facilities-based carriers because each

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operates a network principally using its own transmission facilities and
extensive geographically dispersed switching equipment. The completed Qwest
Network would enable the Company to become this type of facilities-based
carrier generally. All of the Tier 1 carriers, including AT&T, lease some of
their transmission facilities from other carriers to back up their service
routing, augment areas where they may have traffic bottlenecks or cover a
particular geographic area not covered by their own networks.

Medium-sized long distance companies, some with national capabilities,
constitute the "Tier 2" companies in the long distance market. Certain Tier 2
carriers are known as "partial facilities-based" carriers in that they own
some of their own transmission facilities but operate using mostly leased
facilities. However, most Tier 2 carriers are nonfacilities-based carriers in
that they lease all of their transmission facilities. Tier 2 carriers design,
manage and operate their own networks just as the Tier 1 carriers, but
generally on a smaller regional scale, focusing on selling traffic originating
in their target geographic area. These carriers are also generally referred to
as "switch-based" or "switched" because they typically operate their own
switches. Some of these carriers lease high volume DS-3 capacity and resell
lower volume DS-1 capacity to other carriers at higher unit prices. DS-3 level
capacity is generally only sold by carriers that own facilities on the route
on which the service is sold.

The "Tier 3" carriers, often called "switchless" resellers, neither operate
networks nor own facilities, but rather resell "minutes" of service which they
purchase from other carriers. These companies, which vary significantly in
size, are primarily sales and marketing companies that generate their margins
by buying in large volumes to obtain a low price per minute from switch-based
carriers and reselling at higher prices. These companies may receive an
invoice from their underlying carrier and bill the end user or, in some cases,
the underlying carrier may bill the end user directly. The barriers to entry
into this segment of the long distance market are minimal and there are
currently numerous Tier 3 companies providing long distance services. As its
business increases, a Tier 3 company may install its own switch and move into
the Tier 2 category.

According to data included in Long Distance Market Shares, Third Quarter
1996, an FCC report issued in January 1997, while long distance revenue grew
at a compound annual rate of approximately 6% during the period from 1989
through 1995, the revenue of all carriers other than the Tier 1 carriers grew
in the aggregate at a compound rate of approximately 17% during the same
period. This analysis also stated that the Tier 2 and Tier 3 carriers
increased their market share fivefold over an 11-year period, increasing from
less than 3% in 1984 to more than 14% in 1995. The Tier 2 and Tier 3 carriers
generated 1995 revenue of approximately $10.2 billion.

Operator services companies concentrate on providing operator services and
other communications services to long distance industry, private pay phone
operators, prisons and credit card companies. These carriers also manage their
own networks and switching networks and switching equipment while leasing
virtually all of their facilities.

Competition in the retail long distance industry is based upon pricing,
customer service, network quality and valued-added services, creating
opportunities for smaller long distance providers. Sales efforts of long
distance companies focus increasingly on telemarketing and the use of
independent contractors rather than full-time employees. This has created an
opportunity for smaller companies to compete in certain segments of the long
distance market, and many of them are quickly able to build sizable customer
bases on the strength of their marketing efforts and distribution channels.

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BUSINESS

The Company is a facilities-based provider of communications services to
interexchange carriers and other communications entities, businesses and
consumers, and it constructs and installs fiber optic communications systems
for interexchange carriers and other communications entities, as well as for
its own use. The Company is expanding its existing long distance network into
the Qwest Network, a coast-to-coast, technologically advanced, fiber optic
telecommunications network. The Company will employ, throughout substantially
all of the Qwest Network, a self-healing SONET four-fiber ring architecture
equipped with the most advanced commercially available fiber and transmission
electronics manufactured by Lucent and Nortel, respectively. The Qwest
Network's advanced fiber and transmission electronics are expected to provide
the Company with lower installation, operating and maintenance costs than
older fiber systems in commercial use today. In addition, the Company has
entered into construction contracts for the sale of dark fiber along the route
of the Qwest Network, which will reduce the Company's net cost per fiber mile
with respect to the fiber it retains for its own use. As a result of these
cost advantages, the Company believes it will be well-positioned to capture
market share and take advantage of the rapidly growing demand for long haul
voice and data transmission capacity.

The executive offices of Qwest Communications International Inc., a Delaware
corporation, are located at 555 Seventeenth Street, Suite 1000, Denver, CO
80202, and its telephone number is (303) 291-1400. The Company's web site is
http://www.qwest.net.

OPPORTUNITIES

The Company believes that demand from interexchange carriers and other
communications entities for advanced, high bandwidth voice, data and video
transmission capacity will increase over the next several years due to
regulatory and technical changes and other industry developments. These
anticipated changes and developments include: (i) continued growth in capacity
requirements for high speed data transmission, ATM and Frame Relay services,
Internet and multimedia services and other new technologies and applications;
(ii) continued growth in demand for existing long distance services; (iii)
entry into the market of new communications providers; (iv) requirements of
the four principal nationwide carriers (AT&T, MCI, Sprint and WorldCom) to
replace or augment portions of their older systems; and (v) reform in
regulation of domestic access charges and international settlement rates,
which the Company expects will lower long distance rates and fuel primary
demand for long distance services.

. Accommodation of the Internet and Other New Applications. The Company
believes that additional network transmission capacity and faster
response times will be required to accommodate multimedia (voice, data
and video) and other potential high-bandwidth applications, such as
increasing use of the Internet by commercial users, the deployment of
corporate intranets and the use of telecommunications infrastructure for
providing cable television and other entertainment services. The Company
believes this growth will result in increased demand for high-bandwidth
dedicated circuits and other network services provided by the Company
(such as Frame Relay and ATM).

. Base Growth of Existing Providers. The domestic long distance industry
generated approximately $72 billion in total revenue in 1995, according
to a report published by the FCC. The report states that total long
distance revenue grew at a compound annual rate of approximately 6%
during the period 1989 through 1995, while the revenue of all carriers
other than the four Tier 1 carriers, many of which lease network capacity
from facilities-based carriers such as the Company, grew in the aggregate
at a compound annual rate of over 17% during the same period. The carrier
wholesale services segment of the industry generated revenue of
approximately $4.4 billion in 1995 according to a report by the Yankee
Group, a leading market

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research firm, which represented an increase of 7% over 1994 revenue. The
revenue increases were achieved against a backdrop of declining unit
prices for most telecommunications services, which suggests that the
demand for telecommunications bandwidth has increased at an even higher
rate. The Company believes that these growth trends generally will
continue and that certain companies that do not own most of their networks
have potential needs to invest in network facilities or lease high
bandwidth network capacity in order to remain competitive. In addition,
the Company believes that the Qwest Network will allow the Company to
offer an attractive alternative for leased capacity simply to meet current
levels of demand for wholesale telecommunications services.

. Capacity Required by New Entrants. Competition and deregulation are
bringing new entrants into the telecommunications market. The Company
anticipates that this trend will accelerate as a result of the Telecom
Act of 1996. The Telecom Act of 1996 allows the RBOCs and the General
Telephone Operating Companies to enter the long distance business and
enables other entities, including entities affiliated with power
utilities and ventures between LECs and cable television companies, to
provide an expanded range of telecommunications services. As these
entities emerge as long distance competitors, the Company believes they
will need their own facilities and additional high-bandwidth capacity to
compete effectively with facilities-based providers.

. Augmentation of Older Systems. The coast-to-coast fiber systems currently
operated by the Tier 1 carriers were constructed for the most part prior
to 1990, using standard, single mode fiber. Most of these systems were
buried directly in the ground without protective conduit. The conversion
of these older systems to the use of SONET ring architecture requires
increasingly more bandwidth over additional route miles. Accordingly, the
Company believes that the Tier 1 carriers will generally need to replace
or augment parts of their networks to add more capacity, route diversity
and redundancy to their systems and to lower their overall operating
costs. The Company believes that the older, legacy systems operated by
certain of the Tier 1 carriers generally face certain other disadvantages
when compared to the Qwest Network, such as: (i) lower transmission
speeds, lower overall capacity and shorter distances between
regeneration/amplifier facilities; (ii) more costly maintenance
requirements; (iii) greater susceptibility to system interruption from
physical damage to the network infrastructure; and (iv) greater
difficulty in upgrading to more advanced fiber due to lack of a spare
conduit.

. Access Charge and International Settlement Rate Reform. The Company
anticipates that primary demand for long distance services will be
stimulated by reforms of domestic access charges and international
settlement rates and recent international trade negotiations. As long
distance prices decline, the Company expects that overall demand for its
services by carriers, businesses and consumers will increase.

STRATEGY

. Deploy a Technologically Advanced Network. The Company believes the
technical characteristics of the Qwest Network will enable it to provide
highly reliable services to interexchange carriers and other
communications entities at low per unit costs as it expands its customer
base and increases network traffic volume. For instance, the Qwest
Network's advanced fiber optic cable and electronic equipment permit high
capacity transmission over longer distances between
regeneration/amplifier facilities than older fiber systems. This
translates into generally lower installation and operating costs. These
costs typically constitute a significant portion of the overall cost of
providing telecommunications services.

. Build on Network Construction Expertise and Existing Network Assets. The
Company has built over 6,100 route miles of telecommunications conduit
systems over the last eight years for itself

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and major interexchange carriers including AT&T, MCI, Sprint and WorldCom.
Network Construction Services currently employs over 570 experienced
construction personnel led by a six-member senior construction management
team with combined construction experience of over 140 years. The Company
utilizes its own fleet of railroad equipment and has in place railroad and
other right-of-way agreements covering over 87% of the Qwest Network and
already has installed approximately 45% of the route miles of conduit
required for the Qwest Network. In addition, the Company has fixed-price
supply agreements for the provision of all the fiber and transmission
electronics necessary to construct and activate the Qwest Network.

THE QWEST NETWORK

The Company's network infrastructure currently includes, among other assets:
(i) approximately 5,800 route miles of conduit in place, consisting of
approximately 900 route miles of lit fiber systems, one in California, the Cal-
Fiber system, carrying traffic between Los Angeles and Sacramento, and the
other in Texas connecting Dallas and Houston, approximately 3,200 route miles
of dark fiber installed in conduit, and approximately 1,700 route miles of
vacant conduit; (ii) right-of-way agreements in place for approximately 5,300
additional route miles of planned construction for the Qwest Network; (iii) an
approximately 3,500 mile operating digital microwave system (the "Microwave
System"); (iv) approximately 15,000 DS-3 miles of fiber transmission capacity
leased by the Company from other carriers, used primarily to extend the
Company's switched services for originating and terminating traffic beyond the
boundaries of the Company's lit fiber network; and (v) five digital switches.

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Construction of the Qwest Network is scheduled to be completed by late 1998.
Under the Company's current plans, the Qwest Network will extend approximately
13,000 route miles coast-to-coast and connect 92 metropolitan areas that
represent approximately 65% of the originating and terminating long distance
traffic in the United States. Through a combination of the Qwest Network and
leased facilities, the Company will continue to offer interstate services in
all 48 contiguous states. The Qwest Network also will connect to three trans-
Atlantic cable heads and two trans-Pacific cable heads, as well as cross-
border points to Canada and Mexico. These connections will allow Qwest to
participate in the anticipated growth in demand for international long
distance data and voice services.

The Company plans to transfer carrier and retail switched services provided
on leased facilities onto the Qwest Network as the Company activates its own
facilities. As the Qwest Network is completed, the Company may use the
Microwave System to serve certain smaller markets contiguous to the Qwest
Network and to feed traffic onto the Qwest Network.

The physical components of the Qwest Network are: (i) high density
polyethylene conduit, which is hollow tubing 1 1/2" to 2" in diameter; (ii)
fiber optic cable, which consists of fiber strands placed inside a plastic
sheath and strengthened by metal; (iii) electronic equipment necessary to
activate the fiber for transmission; (iv) switches that enable the Company to
provide switched services to carrier and commercial customers; and (v) 92
points of presence, which allow the Company to concentrate customers' traffic
at locations where the Company does not have switches and carry the traffic to
switching centers over the Qwest Network.

Advanced Technology. The Company is installing technologically advanced
fiber optic cable and electronic equipment in a uniform configuration
throughout the Qwest Network, using an advanced network management system. The
Qwest Network's technologies include Lucent's non-zero dispersion shifted
fiber and Nortel's dense wave division multiplexing, forward error correction
technology and SONET four-fiber ring technology that enable the highest
commercially available capacity transmission (OC-192 level) and data integrity
level (10-/15/ Bit Error Rate).

The Qwest Network is designed for superior security and reliability, based
on (i) bi-directional SONET four-fiber ring architecture, a self-healing
system that allows for instantaneous rerouting and virtually eliminates
downtime in the event of a fiber cut; (ii) fiber cable installed in high
density polyethylene conduit generally buried 42"-56" below the ground; and
(iii) extensive use of railroad rights-of-way, which typically offer greater
protection of the fiber system than other systems built over more public
rights-of-way such as highways, telephone poles or overhead power transmission
lines.

The Qwest Network is designed for expandability and flexibility and will
contain two conduits along substantially all of its route. The first conduit
will contain a cable generally housing at least 96 fibers, and the second
conduit will serve as a spare. The spare conduit will allow for future
technology upgrades and expansion of capacity at costs significantly below the
cost of new construction. After existing and anticipated dark fiber sales, the
Company generally plans to retain a minimum of 48 fibers for its own use in
the Qwest Network. With the combined use of non-zero dispersion shifted fiber,
dense wave division multiplexing and high bit rate transmission electronics,
each of the fibers retained by the Company can achieve substantially greater
capacity per fiber than standard, single mode fiber now in use.

The Company monitors its current network, and will monitor the Qwest
Network, 24 hours a day, seven days a week from its Network Management Center
in Denver, Colorado. This facility provides centralized network surveillance,
troubleshooting and customer service, using technology that enables the
Company to reduce service costs and customer downtime. The system currently
allows the Company's technicians to detect a component malfunction in the
Qwest Network, quickly reroute the customer to an available alternate path and
effect an expedited repair. Upon completion of the Qwest Network with its
SONET four-fiber ring architecture, the rerouting function will be fully
automated. In addition, the Company is deploying new management tools,
including Nortel's Integrated Network

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Management Solutions, that will give the Company's Carrier Services customers
the ability to monitor and reconfigure their leased capacity on an essentially
real time basis from their own network management centers and the ability to
rapidly increase or reduce bandwidth to better match their needs. The
available software features equipment inventory management, bandwidth
inventory management, configuration management, fault isolation management,
"point-and-click" provisioning on partitioned network and alarm monitoring.
The Company also has a facility in Dallas that monitors the Microwave System.
The Company currently maintains a staff of approximately 180 technicians and
other related personnel across the system to provide maintenance and technical
support services.

Railroad Rights-of-Way. The Company has right-of-way agreements in place
that provide it with access to over 30,000 track miles. The Company believes
that use of railroad rights-of-way, along with the protective conduit, give
the Company inherent advantages over other systems built over more public
rights-of-way, such as highways, telephone poles or overhead power
transmission lines. These advantages include higher security for the Qwest
Network and greater protection of the fiber system.

Railroad rights-of-way also provide the Qwest Network generally with a
direct, continuous route between cities. This eliminates the potential need,
and the associated time and costs, to piece together rights-of-way using a
combination of agreements with private owners and state or municipal agencies.
In addition, railroad rights-of-way typically extend into downtown areas of
cities that are strategically important to the Company. The Company's right-
of-way agreements provide for continuing or lump-sum cash payments, exchanges
of rights-of-way for network capacity or a combination of both. The Company
has other right-of-way agreements in place, where necessary or economically
preferable, with highway commissions, utilities, political subdivisions and
others.

Between 70% and 80% of the Qwest Network will be installed on railroad
rights-of-way. The Company has in place agreements for over 87% of the rights-
of-way needed for completion of the Qwest Network. The remaining rights-of-way
needed for completion of the Qwest Network consist of approximately 1,600
route miles located primarily in the Midwest and Mid-Atlantic regions. The
Company has identified alternative rights-of-way for these route miles and is
currently in negotiations with respect to all of them.

Network Installation. The Company's network installation process along
railroad rights-of-way combines traditional railroad activities and modern
engineering and building techniques. The Company employs over 570 experienced
construction personnel and uses its own fleet of railroad equipment. The
Company supplements these personnel with independent contractors.

The Company generally installs conduit on railroad rights-of-way with a
"plow train." Plow trains consist of locomotives, plow cars and several supply
cars. The locomotives are used in a traditional manner to pull the plow train
along the railroad track. The plow cars are engineered to accommodate a large
plow that extends from the side of the car. The plow is lowered into the
ground and digs a trench as the locomotives pull the plow train forward. The
supply cars carry the supply of conduit and other construction materials
needed to construct the fiber route and are designed to continuously feed
supplies to the plow cars.

A plow car travels along the railroad track and simultaneously plows a
trench approximately 42"-56" deep and approximately eight feet from the
nearest rail, feeds multiple conduits into the trench, buries a warning tape
approximately a foot from the surface, and backfills the land to its original
contour. A plow can cover up to four miles a day, depending on the
availability of track time and the severity of the terrain.

In situations where the conduit must be laid across a bridge or through a
tunnel, the Company typically places the conduit in a galvanized steel pipe,
and the pipe is attached to the side of the bridge or along the tunnel floor
or wall. When the conduit must be run under rivers or other obstructions, the
Company's installation personnel use directional boring techniques to bore
small tunnels underneath the rivers or obstructions and feed the conduit
through the completed tunnels.

After the conduit has been buried along the railroad track (or attached to a
bridge or tunnel), the fiber optic cable is installed or "pulled" through the
conduit. The Company accomplishes this through

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the use of access boxes that are installed along the Qwest Network at
approximately one mile intervals. These access boxes also allow Company
employees to make repairs or replace or install additional fiber. The access
boxes typically contain an additional loop of the fiber cable to provide slack
in the system to accommodate displacement, disruption or movement of the
conduit as a result of digging or excavation activities, floods, earthquakes
or other events. The presence of the additional fiber cable reduces the risk
that the cable will be cut or broken.

For routes not using railroad rights-of-way, the Company uses "tractor
plows." Tractor plows are tractor pulled plow vehicles equipped to plow
trenches and install conduit. Tractor plows also may be used in certain places
along railroad rights-of-way depending on space, availability of track time
and other factors. These tractor plows generally perform the same functions in
a similar manner as the rail plows.

Railroad rights-of-way, which are usually less accessible to the public than
highways and less vulnerable to physical damage than aerial systems installed
along telephone poles or overhead power transmission lines, reduce the risk of
outside interference or damage to the Company's conduit. The Company has also
implemented a "Call Before U Dig" ("CBUD") program, backed up by its 24-hour
Network Management Center to reduce the risk of damage to the conduit or fiber
system. Additionally, above ground markers are placed at frequent intervals
along the route of the Qwest Network.

Dark Fiber Sales. The Company has entered into agreements with Frontier,
WorldCom and GTE whereby each is purchasing dark fiber along the Qwest
Network. The proceeds from construction contracts for the sale of dark fiber
will provide cash for a significant portion of the total estimated costs to
construct the Qwest Network and complete construction relating to the dark
fiber sold to Frontier, WorldCom and GTE, and are expected to provide the
Company with a strategic network cost advantage on the fibers that the Company
retains for the Qwest Network. The Frontier and GTE agreements each provide
for the purchase of 24 fibers along all of the route of the Qwest Network. The
WorldCom agreement provides for the purchase of 24 fibers along certain
selected segments of the Qwest Network and 36 fibers along other selected
segments. Frontier had an option to purchase an additional 24 fibers along the
entire route of the Qwest Network, which option expired in April 1997. The
Company subsequently entered into the GTE agreement, under which GTE purchased
these 24 fibers. Each contract requires the purchaser to pay an aggregate
price consisting of an initial payment followed by installments during the
construction period based on the Company's achievement of certain milestones
(e.g., conduit installation and fiber splicing), with final payment for each
segment made at the time of acceptance. Each agreement contains provisions
establishing construction specifications and fiber splicing, testing and
acceptance procedures and requiring the Company to maintain rights-of-way with
respect to the system route for the economically useful life of the fibers
sold. Each agreement also provides for the sharing of certain maintenance
costs. The Frontier and GTE contracts also provide for sharing of certain
operating costs. The agreements establish anticipated delivery dates for
construction and delivery of segments along the route of the Qwest Network.
Delivery may be extended under each contract for force majeure events. The
Frontier and GTE contracts provide for reduced payments in the event of delay
or non-delivery of segments and, in certain circumstances, penalties of
varying amounts depending upon the reason for the delay or non-delivery, and
allow Frontier and GTE to delete any non-delivered segment from the system
route to be delivered. The Company has executed performance bonds in favor of
Frontier. In addition, if Frontier or GTE fails to make payment with respect
to any segment, the Company may terminate Frontier's or GTE's rights relating
to all remaining undelivered segments. Frontier's parent company, Frontier
Corporation, has guaranteed payment of Frontier's payment obligations under
the contract.

The Company believes that significant opportunities exist to sell additional
dark fiber throughout the Qwest Network and management has identified and is
in various stages of negotiations with potential customers. However, the
Company does not expect to enter into additional agreements of the size and
scope of the Frontier and GTE contracts. These potential customers include
other

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interexchange carriers, cable, entertainment and data transmission companies,
RBOCs, ISPs, LECs and CLECs. The Company believes that these potential
customers will view the Company, with its construction capabilities and
emphasis on being a "carrier's carrier," as an attractive source for certain
of their long distance transmission needs. In order to meet the needs of this
diverse group of customers, the Company expects to offer a wide variety of
pricing and system options to meet specific needs of each customer. For
example, customers may purchase or lease dark fiber or purchase capacity on a
short- or long-term basis.

Generally, the Company's plans provide for the installation of 96 fibers
along the entire route of the Qwest Network. The Frontier and GTE agreements
each provide for the purchase of 24 fibers along all of the route of the Qwest
Network. The WorldCom agreement provides for the purchase of 24 fibers along
certain selected segments of the Qwest Network and 36 fibers along other
selected segments. Several smaller construction contracts for sales of dark
fiber provide for the sale of smaller numbers of fibers over a more limited
number of segments. In segments where the Company agrees under construction or
sales contracts to sell more than 48 fibers, it generally will install more
than 96 fibers so that it can retain 48 fibers for its own use along
substantially all of the route of the Qwest Network.

With the installation of the advanced transmission electronics contracted to
be purchased from Nortel, the fibers initially activated by Qwest will have a
transmission capacity of 20 gigabits per second, which will more than
accommodate the growth in Carrier Services and Commercial Services anticipated
by the Company over the next five years. If the Company fully activated all of
its retained fibers by installing additional amounts of the same transmission
electronics, which is not currently planned, it could further expand the
transmission capacity to approximately two terabits per second.

Build-Out Plan for the Qwest Network. The Company estimates the total cost
to construct and activate the Qwest Network and complete construction of the
dark fiber sold to Frontier, WorldCom and GTE will be approximately $1.4
billion. Of this amount, the Company had already expended approximately $400.0
million as of May 31, 1997. The Company anticipates remaining total cash
outlays for these purposes of approximately $500.0 million in 1997 and $500.0
million in 1998. Estimated total expenditures for 1997 include the Company's
commitment to purchase a minimum quantity of fiber for approximately $257.0
million (subject to quality and performance specifications), of which
approximately $100.0 million had been expended as of May 31, 1997. Estimated
total expenditures for 1997 and 1998 together also include $100.0 million for
the purchase of electronic equipment. In addition, the Company anticipates
approximately $97.0 million of capital expenditures in 1997 and 1998 to
support growth in Carrier Services and Commercial Services.

As of the date of this Prospectus, the Company has obtained the following
sources of funds to complete the build-out: (i) approximately $1.0 billion
under the Frontier, WorldCom and GTE contracts and additional smaller
construction contracts for sales of dark fiber, of which approximately $286.0
million had already been paid and $733.0 million remained to be paid at May
31, 1997; (ii) $90.0 million of vendor financing; (iii) $117.8 million in net
proceeds from the sale on March 31, 1997 of $250.0 million in principal amount
of the Notes remaining after repayment of certain existing debt; and (iv)
approximately $320.0 million in net proceeds from the Initial Public Offering.

The Company expects to finance the construction of the Qwest Network, as
well as its debt service and working capital needs, primarily through a
combination of the funding sources identified above and future borrowings.

With the completion of the 13,000 route mile network, Qwest will provide
services nationally to its customers primarily over its own facilities using
leased facilities in those portions of the country not covered by the Qwest
Network. Qwest will continue to evaluate the economics of extending its core
network versus continuing to lease network capacity. In this regard, the
Company is considering extensions in the Southeast United States, the
California Valley and, perhaps, the Pacific Northwest. The Company has made no
final decisions in this regard, and any decisions would be dependent, among
other things, upon the Company's assessment of the potential for dark fiber
sales or long-term leases of high volume capacity and the availability of
additional capital on acceptable terms.

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CARRIER SERVICES

General. The Company has been positioned historically in the long distance
business as a "carrier's carrier," providing dedicated line and switched
services to other carriers over the Company's owned or leased fiber optic
network facilities. Management believes that the Company has earned a
reputation of providing quality services at competitive prices to meet
specific customer needs. Total revenues from Carrier Services were
approximately $57.6 million, $67.8 million and $50.2 million for the years
1996, 1995 and 1994, respectively, and approximately $11.2 million and $18.5
million for the three months ended March 31, 1997 and 1996, respectively.

Products. Products offered by Carrier Services fall into three primary
categories: (i) high volume capacity services; (ii) conventional dedicated
line services; and (iii) switched services.

. High Volume Capacity Services. The Company provides high volume
transmission capacity at or above the OC-3 level (or its equivalent)
through service agreements for terms of one year or longer. As the Qwest
Network is deployed, the Company also is targeting potential large users
in the inter-LATA market that may seek to augment their own networks or
provide diverse routing alternatives in strategic areas of their systems.

. Conventional Dedicated Line Services. The Company currently provides
dedicated line services on owned capacity to a wide range of customers at
capacities below the OC-3 level generally for terms of one year or less.
The Company expects the Qwest Network will enable the Company to offer
these services over a significantly expanded geographic area.

. Switched Services. The Company currently provides switched terminating
services over its switched service network to large and small long
distance carriers. The carrier switched terminating service business is
specifically used to increase volume on the Company's switched service
network to allow for more efficient "trunking" of calls. While the
carrier switched services generate revenue at lower margins than the
dedicated line services, such services facilitate cost effective
management of the Qwest Network.

The Company also plans to provide high speed ATM and Frame Relay data
services to Internet Service Providers by installing ATM and Frame Relay
switching equipment following completion of the Company's coast-to-coast
backbone route at the end of 1997.

Customers. Carrier Services' customer base in the inter-LATA carrier market
consists of the following:

. Tier 1 and Tier 2 Carriers. The Company offers high volume transmission
capacity, conventional dedicated line services and dedicated switched
services to the Tier 1 and Tier 2 carriers on a national or regional
basis. As RBOCs enter the long distance market, the Company believes they
will be potential customers to lease high volume capacity from the
Company on a national basis.

. Tier 3 Carriers. The Company currently offers switchless resale services
to Tier 3 carriers on a limited basis. The Company anticipates that this
business will expand as coverage of the Company's switched network grows.

. Internet Service Providers. The Company believes that ISPs will become
customers for significant high volume capacity. The Company is providing
capacity at the OC-3 level on its Cal-Fiber system under a recently
signed contract with an ISP.

. Operator Services Companies and Other Niche Companies. These companies
concentrate on providing operator services and other communications
services to the long distance industry, private payphone operators,
prisons and credit card companies. These carriers also manage their own
networks and switching equipment while leasing virtually all of their
transmission facilities. The Company provides transmission services to
these carriers.

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Service Agreements. The Company provides high volume transmission capacity
services through service agreements for terms of one year or longer. Dedicated
line services are generally offered under service agreements for an initial
term of one year. High volume capacity service agreements and dedicated line
service agreements generally provide for "take or pay" monthly payments at
fixed rates based on the capacity and length of circuit used. Customers are
typically billed on a monthly basis and also may incur an installation charge
or certain ancillary charges for equipment. After contract expiration, the
contracts may be renewed or the services may be provided on a month-to-month
basis. Switched services agreements are generally offered on a month-to-month
basis and the service is billed on a minutes-of-use basis. Revenues from
carrier customers that are billed on a minutes-of-use basis have the potential
to fluctuate significantly based on changes in usage that are highly dependent
on differences between the prices charged by the Company and its competitors.
The Company, however, has not experienced significant fluctuations to date.

COMMERCIAL SERVICES

General. The Company began offering Commercial Services in 1993. Commercial
Services focuses primarily on the sale of inter-LATA long distance services to
the retail market, principally to small- and medium-sized businesses and to
consumers. The Company currently provides facilities-based services along the
Cal-Fiber and Texas routes, and is a switch based reseller elsewhere. Total
revenues from Commercial Services were approximately $34.3 million, $20.4
million and $8.7 million in 1996, 1995 and 1994, respectively, and
approximately $9.4 million and $7.0 million in the three months ended March
31, 1997 and 1996, respectively. The Company plans to transfer carrier and
commercial switched traffic from leased facilities onto the Qwest Network as
it is activated. As traffic volumes increase and the Company carries a greater
percentage of traffic on the Qwest Network, the Company believes it will
realize economies of scale and thereby lower its cost of sales as a percentage
of revenue. See "Risk Factors--Risks Related to Completing the Qwest Network;
Increasing Traffic Volume."

Products. The Company markets the following products:

. One Plus. This basic service offers customers the ability to make
outbound long distance calls from any local telephone line by simply
dialing a 1, plus the area code and phone number. Customers select the
Company as their primary long distance provider by placing an order with
it. This service may be used for both domestic and international calling.

. 10XXX. This service allows the customer to access the Qwest Network by
dialing 10056 plus 1, plus the area code and phone number, with no need
to change their primary long distance provider. These customers are
solicited through direct mailing and receive a sticker to place on their
phones.

. Dedicated Access Service. These lines are designed for larger users with
enough traffic volume to warrant the use of a dedicated access line to
originate calls. Instead of a switched access line that is shared by many
users, this service uses a high capacity line that is used exclusively to
connect between the end user and the long distance carrier's switch. This
results in lower originating access cost and reduced rates to the user.

. Toll Free 800/888. This inbound service, where the receiving party pays
for the call, is accessed by dialing an 800/888 area code. This is used
in a wide variety of applications, many of which generate revenue for the
user (such as reservation centers or customer service centers). The
Company plans to introduce additional enhanced features such as call
routing by origination point, time of day routing and other premium,
high-margin features in 1997.

. Calling Card. These traditional, basic telephone calling cards allow the
user to place calls from anywhere in the United States or Canada. The
Company offers additional higher margin features such as conference
calling, international origination, information service access (such as
weather or stock quotes), speed dialing and voice messaging.

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. Prepaid Card. Prepaid cards allow a customer to purchase and pay in
advance for a card with a fixed amount of calling time. The card is then
used as a standard calling card. Prepaid cards may be purchased with
enhanced features similar to those of calling cards and also may be
renewed by purchasing additional time.

. International Callback. This service operates by allowing a customer in a
foreign country to place a toll-free call to the U.S. and be "called
back" by the Company's equipment. The Company charges a rate similar to
that which the customer would pay if the call were originally initiated
in the U.S., allowing the customer to take advantage of the fact that the
rates for calling from the U.S. to many foreign destinations are lower
than the cost of the same call if it were originated in the foreign
country.

. Media Express(TM). This is an exclusive switched digital broadband
service that provides variable bandwidth for video communications and
other data applications on demand and allows users to control all the
required components of a video conference from a personal computer.

Other services offered by Commercial Services include audio conferencing,
operator services, directory assistance, special rate structures, custom
services, special contract pricing and special local access arrangements in
selected markets. In addition, the Company intends to develop and offer
additional value-added services to its customers, particularly business
customers, to differentiate the Company from its competitors and enhance
Commercial Services' profit margins. The Company also is evaluating and
intends to introduce in the future a variety of services specifically designed
to capture a share of the growing data networking market.

Customers. The Company is currently targeting businesses spending up to
$1,000 per month on long distance and intends to expand this target segment in
early 1998 to businesses spending from $2,000 to $10,000 per month on long
distance. The strategy of Commercial Services is to develop a customer base in
geographic proximity to the Qwest Network.

NETWORK CONSTRUCTION SERVICES

General. The Company's Network Construction Services operations commenced in
1988 with the construction of conduit systems for major interexchange
carriers. Since then, Network Construction Services has served as the platform
for the Company's expansion into Carrier Services and, since 1993, Commercial
Services. Total revenue from Network Construction Services were approximately
$139.2 million, $36.9 million and $11.9 million for the years ended 1996, 1995
and 1994, respectively, and approximately $52.1 million and $9.1 million for
the three months ended March 31, 1997 and 1996, respectively.

The Company has built for itself and other carriers approximately 6,100
route miles of telecommunications conduit systems principally along railroad
rights-of-way. Management believes that this experience and expertise create
competitive advantages for the Company in the construction, ongoing
maintenance and operation of the Qwest Network.

Products. The principal product of Network Construction Services
historically has been turn-key conduit systems built for other carriers. In
most cases, while fulfilling customer contracts, the Company installed
additional conduit that it retained for its own use. The Company is using its
Network Construction Services resources to implement its strategic plan to
complete the Qwest Network, in addition to providing Network Construction
Services to third party customers along Qwest Network routes.

Commencing in 1996, the Company began selling dark fiber to
telecommunications entities to help fund development of the Qwest Network. In
1996, the Company's Network Construction Services revenue was derived largely
from two principal dark fiber sales contracts with Frontier and WorldCom. The
Company expects that these two contracts, along with the May 1997 contract
with GTE, will generate the majority of Network Construction Services revenue
in 1997 and 1998. In addition, the Company expects to generate additional
revenue through the sale of dark fiber along various segments of the Qwest
Network to other carriers.

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Customers. Network Construction Services customers historically have been
primarily interexchange carriers, as well as major LECs and other
telecommunications companies. For the year ended December 31, 1996, WorldCom
was the Company's largest single Network Construction Services customer,
accounting for 27.8% of the Company's consolidated gross revenue, and Frontier
accounted for 26.3% of the Company's consolidated gross revenue. No other
customers accounted for more than 10% of consolidated gross revenue. For the
year ended December 31, 1995, MCI was the Company's largest single customer,
accounting for 35.4% of consolidated gross revenue. No other customer
accounted for more than 10% of consolidated gross revenue in 1995. For the
year ended December 31, 1994, WorldCom was the Company's largest single
customer, accounting for 18% of consolidated gross revenue. No other customer
accounted for more than 10% of consolidated gross revenue in 1994. In the
first three months of 1997, Frontier was the largest single customer,
accounting for 59.0% of the Company's consolidated gross revenue, with
WorldCom accounting for 8.8%.

SALES AND MARKETING

The Company sells network dedicated and switched services to carriers
through its carrier sales organization. This organization consists of senior
level management personnel and experienced sales representatives with
extensive knowledge of the industry and key contacts within the industry at
various levels in the carrier organizations. The Company also markets its
construction services for dark fiber and conduit systems through its carrier
sales organization. Contacts are made primarily through individual premises
visits and at meetings of trade associations that serve large carriers.

In Commercial Services, the Company currently solicits targeted businesses
through telemarketing personnel and independent contractors and will establish
a direct sales channel as it expands its targeted segment to higher volume
users. Consumer customers currently are solicited by the Company through a
combination of direct marketing and independent contractors. The Company plans
to build on its Carrier Services experience to expand its presence in the
Commercial Services market by creating a distinctive brand identity for
"Qwest" and aggressively marketing its existing and planned voice, data and
other transmission products and services. The Company plans to build direct
end user relationships by developing strong distribution channels, providing
competitive pricing and superior network quality and offering enhanced,
market-driven services to businesses and consumers.

COMPETITION

There are currently four principal facilities-based long distance fiber
optic networks. The Company is aware that others are planning additional
networks that, if constructed, could employ similar advanced technology as the
Qwest Network. Upon completion of the Qwest Network, each of Frontier and GTE
will have a fiber network similar in geographic scope and potential operating
capability to that of the Company. Another competitor is constructing, and has
already obtained a significant portion of the financing for, a fiber optic
network. The scope and capacity of that competitor's network, as publicly
announced, is less than that of the Company, and does not contain all of the
advanced technologies designed for the Qwest Network, but nevertheless is
expected to compete directly with the Qwest Network for many of the same
customers along a significant portion of the same routes.

The Company's competitors in Carrier Services include many large and small
interexchange carriers. The Company's Carrier Services business competes
primarily on the basis of pricing, transmission quality, reliability and
customer service and support. Commercial Services has been and expects to
continue to be a provider of high quality, low cost service primarily to
small- and medium-sized business customers and consumers. The Company intends
to move into the market for higher volume business customers as the Qwest
Network is completed and new products are introduced. In recent years the
small- and medium-sized business market has experienced increased competition.
The industry wide changes in technology and the effects of deregulation
resulting from the Telecom Act of 1996 are likely to further increase
competition. Many of the Company's competitors and potential competitors have
financial, personnel and other resources substantially greater than those of
the Company. See "Risk Factors--Competition" and "Industry Overview--
Telecommunications Markets."

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In the future, the Company may be subject to additional competition due to
the development of new technologies and increased supply of domestic and
international transmission capacity. The telecommunications industry is in a
period of rapid technological evolution, marked by the introduction of new
product and service offerings and increasing satellite transmission capacity
for services similar to those provided by the Company. For instance, recent
technological advances permit substantial increases in transmission capacity
of both new and existing fiber, and the introduction of new products or
emergence of new technologies may reduce the cost or increase the supply of
certain services similar to those provided by the Company. The Company cannot
predict which of many possible future product and service offerings will be
important to maintain its competitive position or what expenditures will be
required to develop and provide such products and services.

High initial network cost and low marginal costs of carrying long distance
traffic have led to a trend among nonfacilities-based carriers to consolidate
in order to achieve economies of scale. Such consolidation could result in
larger, better capitalized competitors. However, the Company believes that
such competitors would also be stronger prospects as potential Carrier
Services customers.

The Company believes that its railroad rights-of-way offer a more secure
route for the Qwest Network than other types of rights-of-way. There can be no
assurance that competitors will not obtain rights to use railroad rights-of-
way for expansion of their networks, although the Company believes that it
would involve significant time and effort for competitors to assemble railroad
rights-of-way comparable to those that the Company already has available for
the Qwest Network.

PROPERTIES

The Qwest Network in progress and its component assets are the principal
properties owned by the Company. The Company owns substantially all of the
telecommunications equipment required for its business. The Company's
installed fiber optic cable is laid under the various rights-of-way held by
the Company. Other fixed assets are located at various leased locations in
geographic areas served by the Company.

The Company's executive, administrative and sales offices and its Network
Management Center are located at its principal office in Denver, Colorado.
Qwest leases this space from an affiliate of Anschutz Company at market rates
under an agreement that expires in August 1999. The Company leases additional
space in Dallas, Texas, housing the headquarters for operation of its
Microwave System.

In December 1995, the Company entered into an agreement (as amended in
January 1997) with Ferrocarriles Nacionales de Mexico whereby the Company was
granted easements for the construction of multiple conduit systems along
railroad rights-of-way within Mexico for consideration of approximately $7.7
million, including $1.1 million in value-added taxes. The Company has
capitalized total costs, including right-of-way, equipment, construction and
design costs, relating to this investment of approximately $13.0 million as of
December 31, 1996.

EMPLOYEES

As of May 31, 1997, the Company employed approximately 950 employees of
which 110 perform corporate and administrative services, 570 provide Network
Construction Services, 80 provide Commercial Services, 10 provide Carrier
Services, and 180 perform network engineering and related functions. The
Company uses the services of independent contractors for installation and
maintenance of portions of the Qwest Network. None of the Company's employees
are currently represented by a collective bargaining agreement. The Company
believes that its relations with its employees are good.

LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various claims and
proceedings in the ordinary course of business. Based on information currently
available, the Company believes that none of such current claims or
proceedings, individually or in the aggregate, will have a material adverse
effect on the Company's financial condition or results of operations, although
there can be no assurances in this regard.

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REGULATION

GENERAL REGULATORY ENVIRONMENT

The Company's operations are subject to extensive federal and state
regulation. Carrier Services and Commercial Services (but not Network
Construction Services) are subject to the provisions of the Communications Act
of 1934, as amended, including the Telecom Act of 1996, and the FCC
regulations thereunder, as well as the applicable laws and regulations of the
various states, including regulation by PUCs and other state agencies. Federal
laws and FCC regulations apply to interstate telecommunications (including
international telecommunications that originate or terminate in the United
States), while state regulatory authorities have jurisdiction over
telecommunications both originating and terminating within the state. The
regulation of the telecommunications industry is changing rapidly, and the
regulatory environment varies substantially from state to state. Moreover, as
deregulation at the federal level occurs, some states are reassessing the
level and scope of regulation that may be applicable to the Company. All of
the Company's operations are also subject to a variety of environmental,
safety, health and other governmental regulations. There can be no assurance
that future regulatory, judicial or legislative activities will not have a
material adverse effect on the Company, or that domestic or international
regulators or third parties will not raise material issues with regard to the
Company's compliance or noncompliance with applicable regulations.

A recent federal legislative change, the Telecom Act of 1996, may have
potentially significant effects on the operations of the Company. The Telecom
Act of 1996, among other things, allows the RBOCs and the General Telephone
Operating Companies to enter the long distance business, and enables other
entities, including entities affiliated with power utilities and ventures
between LECs and cable television companies, to provide an expanded range of
telecommunications services. Entry of such companies into the long distance
business would result in substantial competition to the Company's Commercial
Services and Carrier Services customers, and may have a material adverse
effect on the Company and such customers. However, the Company believes that
the RBOCs' and other companies' participation in the market will provide
opportunities for the Company to sell fiber or lease long distance high volume
capacity.

Under the Telecom Act of 1996, the RBOCs may immediately provide long
distance service outside those states in which they provide local exchange
service ("out-of-region" service), and long distance service within the
regions in which they provide local exchange service ("in-region" service)
upon meeting certain conditions. The General Telephone Operating Companies may
enter the long distance market without regard to limitations by region. The
Telecom Act of 1996 does, however, impose certain restrictions on, among
others, the RBOCs and General Telephone Operating Companies in connection with
their provision of long distance services. Out-of-region services by RBOCs are
subject to receipt of any necessary state and/or federal regulatory approvals
that are otherwise applicable to the provision of intrastate and/or interstate
long distance service. In-region services by RBOCs are subject to specific FCC
approval and satisfaction of other conditions, including a checklist of pro-
competitive requirements. The RBOCs may provide in-region long distance
services only through separate subsidiaries with separate books and records,
financing, management and employees, and all affiliate transactions must be
conducted on an arm's length and nondiscriminatory basis. The RBOCs are also
prohibited from jointly marketing local and long distance services, equipment
and certain information services unless competitors are permitted to offer
similar packages of local and long distance services in their market. Further,
the RBOCs must obtain in-region long distance authority before jointly
marketing local and long distance services in a particular state.
Additionally, AT&T and other major carriers serving more than 5% of
presubscribed long distance access lines in the United States are also
restricted from packaging other long distance services and local services
provided over RBOC facilities. The General Telephone Operating Companies are
subject to the provisions of the Telecom Act of 1996 that impose
interconnection and other requirements on LECs. General Telephone Operating
Companies providing long distance services must obtain regulatory approvals
otherwise applicable to the provision of long distance services.

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FEDERAL REGULATION

The FCC has classified QCC, the Company's principal operating subsidiary, as
a non-dominant carrier. Generally, the FCC has chosen not to exercise its
statutory power to closely regulate the charges, practices or classifications
of non-dominant carriers. However, the FCC has the power to impose more
stringent regulation requirements on the Company and to change its regulatory
classification. In the current regulatory atmosphere, the Company believes
that the FCC is unlikely to do so with respect to the Company's domestic
service offerings.

The FCC regulates many of the charges, practices and classifications of
dominant carriers to a greater degree than non-dominant carriers. Among
domestic carriers, large LECs and the RBOCs are currently considered dominant
carriers for the provision of interstate access services, while all other
interstate service providers are considered non-dominant carriers. On April
18, 1997, the FCC ordered that the RBOCs and independent LECs offering
domestic interstate inter-LATA services, in-region or out-of-region, be
regulated as non-dominant carriers. However, such services offered in-region
must be offered in compliance with the structural separation requirements
mentioned above. AT&T was classified as a dominant carrier, but AT&T
successfully petitioned the FCC for non-dominant status in the domestic
interstate interexchange market in October 1995 and in the international
market in May 1996. Therefore, certain pricing restrictions that once applied
to AT&T have been eliminated. A number of parties have, however, sought the
FCC's reconsideration of AT&T's status. The Company is unable to predict the
outcome of these proceedings on its operations.

As a non-dominant carrier, QCC may install and operate facilities for the
transmission of domestic interstate communications without prior FCC
authorization, so long as QCC obtains all necessary authorizations from the
FCC for use of any radio frequencies. Non-dominant carriers are required to
obtain prior FCC authorization to provide international telecommunications,
and the Company has obtained such authorization for international switched
resale services. The FCC also imposes prior approval requirements on certain
transfers of control and assignments of operating authorizations. Non-dominant
carriers are required to file periodic reports with the FCC concerning their
interstate circuits and deployment of network facilities. The Company is
required to offer its interstate services on a nondiscriminatory basis, at
just and reasonable rates, and remains subject to FCC complaint procedures.
While the FCC generally has chosen not to exercise direct oversight over cost
justification or levels of charges for services of non-dominant carriers, the
FCC acts upon complaints against such carriers for failure to comply with
statutory obligations or with the FCC's rules, regulations and policies. The
Company or any of its operating subsidiaries could be subject to legal actions
seeking damages, assessment of monetary forfeitures and/or injunctive relief
filed by any party claiming to have been injured by the Company's practices.
The Company cannot predict either the likelihood of the filing of any such
complaints or the results if filed.

Under existing regulations, non-dominant carriers are required to file with
the FCC tariffs listing the rates, terms and conditions of both interstate and
international services provided by the carrier. Pursuant to such regulations,
the Company has filed with the FCC tariffs for its interstate and
international services. On October 29, 1996, the FCC adopted an order in which
it eliminated, as of September 1997, the requirement that non-dominant
interstate carriers such as the Company maintain tariffs on file with the FCC
for domestic interstate services, although tariffs for international service
must still be filed. Such carriers were given the option to cease filing
tariffs during a nine-month transition period that concludes on September 22,
1997. The FCC's order was issued pursuant to authority granted to the FCC in
the Telecom Act of 1996 to "forbear" from regulating any telecommunications
service provider if the FCC determines that the public interest will be
served. However, on February 19, 1997, the United States Court of Appeals for
the District of Columbia Circuit suspended the FCC's order pending further
expedited judicial review and/or FCC reconsideration. The Company cannot
predict the ultimate outcome of this or other proceedings on its service
offerings or operations.

61
<PAGE>

On May 8, 1997, the FCC released an order intended to reform its system of
interstate access charges to make that regime compatible with the pro-
competitive deregulatory framework of the Telecom Act of 1996. Access service
is the use of local exchange facilities for the origination and termination of
interexchange communications. The FCC's historic access charge rules were
formulated largely in anticipation of the 1984 divestiture of AT&T and the
emergence of long distance competition, and were designated to replace
piecemeal arrangements for compensating LECs for use of their networks for
access, to ensure that all long distance companies would be able to originate
and terminate long distance traffic at just, reasonable, and non-
discriminatory rates, and to ensure that access charge revenues would be
sufficient to provide certain levels of subsidy to local exchange service.
While there has been pressure on the FCC historically to revisit its access
pricing rules, the Telecom Act of 1996 has made access reform timely. The
FCC's recent access reform order adopts various changes to its rules and
policies governing interstate access service pricing designed to move access
charges, over time, to more economically efficient levels and rate structures.
Among other things, the FCC modified rate structures for certain non-traffic
sensitive access rate elements, moving some costs from a per-minute-of-use
basis to flat-rate recovery, including one new flat rate element; changed its
structure for interstate transport services; and affirmed that ISPs may not be
assessed interstate access charges. In response to claims that existing access
charge levels are excessive, the FCC stated that it would rely on market
forces first to drive prices for interstate access to levels that would be
achieved through competition but that a "prescriptive" approach, specifying
the nature and timing of changes to existing access rate levels, might be
adopted in the absence of competition. The FCC intends to address these and
other related matters in subsequent proceedings. Though the Company believes
that access reform through lowering and/or eliminating excessive access
service charges will have a positive effect on its service offerings and
operations, it cannot predict how or when such benefits may present
themselves, or the outcome of any possible judicial appeal or petition for FCC
reconsideration.

The FCC also released a companion order on universal service reform on May
8, 1997. The universal availability of basic telecommunications service at
affordable prices has been a fundamental element of U.S. telecommunications
policy since enactment of the Communications Act of 1934. The current system
of universal service is based on the indirect subsidization of LEC pricing,
funded as part of a system of direct charges on some LEC customers, including
interexchange carriers such as QCC, and above-cost charges for certain LEC
services such as local business rates and access charges. In accordance with
the Telecom Act of 1996, the FCC adopted plans to implement the
recommendations of a Federal-State Joint Board to preserve universal service,
including a definition of services to be supported, and defining carriers
eligible for contributing to and receiving from universal service subsidies.
The FCC ruled, among other things, that: contributions to universal service
funding be based on all interexchange carriers' gross revenues from both
interstate and international telecommunications services; only common carriers
providing a full complement of defined local services be eligible for support;
and up to $2.25 billion in new annual subsidies for discounted
telecommunications services used by schools, libraries, and rural health care
providers be funded by an assessment on total interstate and intrastate
revenues of all interexchange carriers. The FCC stated that it intends to
study the mechanism for continued support of universal service in high cost
areas in a subsequent proceeding. The Company is unable to predict the outcome
of these proceedings or of any judicial appeal or petition for FCC
reconsideration on its operations.

The Company's Microwave System subsidiary is subject to applicable FCC
regulations for the use of radio frequencies. The FCC issues domestic
microwave radio licenses for limited periods not to exceed 10 years. The
Company must seek renewal of such licenses prior to their expiration. The
Company knows of no facts that would result in the denial of any such
renewals, although there can be no assurance in that regard. Although the FCC
has never denied a microwave license application made by the Company, there
can be no assurance that the Company will receive all authorizations or
licenses necessary to implement its business plan or that delays in the
licensing process will not adversely affect the Company's business.

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<PAGE>

The Communications Act of 1934 limits the ownership by non-U.S. citizens,
foreign corporations and foreign governments of an entity directly or
indirectly holding a common carrier radio license. These ownership
restrictions apply to the Company's Microwave System but currently do not
apply to non-radio facilities, such as fiber optic cable. The FCC recently
adopted new rules relating to requests to exceed the statutory limit on
indirect foreign ownership of common carrier radio licenses, and the
participation of foreign carriers or U.S. entities with foreign carrier
affiliates (generally an ownership interest greater than 25% or a controlling
interest) in an entity holding U.S. international authority. Under those
rules, the FCC will scrutinize either form of foreign participation to
determine whether the relevant foreign market offers "effective competitive
opportunities" ("ECO"). The FCC may impose restrictions (including prohibition
of the proposed participation or investment) on applicants not meeting the ECO
test. The new rules also require international carriers to notify the FCC 60
days in advance of an acquisition of a 10% or greater interest by a foreign
carrier in that U.S. carrier. The FCC has discretion to determine that unique
factors require application of the ECO test or a change in regulatory status
of the U.S. carrier even though the foreign carrier's interest is less than
25%. These rules also reduce international tariff notice requirements for
dominant, foreign-affiliated carriers from 45 days' notice to 14 days' notice.
Such reduced tariff notice requirements may make it easier for dominant,
foreign-affiliated carriers to compete with the Company. The Telecom Act of
1996 partially amends existing restrictions on foreign ownership of radio
licenses by allowing corporations with non-U.S. citizen officers or directors
to hold radio licenses. Other non-U.S. ownership restrictions, however,
currently remain unchanged, but the U.S. has agreed in recent world trade
negotiations to allow for a significant increase in permissible foreign
investment, including 100% indirect foreign ownership of U.S. common carrier
radio licensees. On June 4, 1997, the FCC instituted a proceeding to, among
other things, revisit the continued applicablity of its ECO test in light of
this agreement. Though the Company believes these changes will have a positive
effect on its ability to identify potential sources of capital, the effect on
the Company of the Telecom Act of 1996 or other new legislation, negotiations
or regulations which may become applicable to the Company cannot be
determined.

INTERNATIONAL SETTLEMENTS

Under the international settlement system, international long distance
traffic is exchanged under bilateral correspondent agreements between
facilities-based carriers in two countries. Correspondent agreements generally
are three to five years in length and provide for the termination of traffic
in, and return traffic to, the carriers' respective countries at a negotiated
accounting rate, known as the Total Accounting Rate ("TAR"). In addition,
correspondent agreements provide for network coordination and accounting and
settlement procedures between the carriers. Both carriers are responsible for
their own costs and expenses related to operating their respective halves of
the end-to-end international connection.

Settlement costs, which typically equal one-half of the TAR, are the fees
owed to another international carrier for transporting traffic on its
facilities. Settlement costs are reciprocal between each party to a
correspondent agreement at a negotiated rate (which must be the same for all
U.S. based carriers, unless the FCC approves an exception). For example, if a
foreign carrier charges a U.S. carrier $0.30 per minute to terminate a call in
the foreign country, the U.S. carrier would charge the foreign carrier the
same $0.30 per minute to terminate a call in the United States. Additionally,
the TAR is the same for all carriers transporting traffic into a particular
country, but varies from country to country. The term "settlement costs"
arises because carriers essentially pay each other on a net basis determined
by the difference between inbound and outbound traffic between them.

The difference in cost between providing domestic long distance and
international service is minimal, and technical advances in facilities
deployed for international calling are making distance largely irrelevant to
cost. Increased worldwide competition has already brought about certain
reductions in settlement rates and end user prices, thereby reducing overseas
termination costs for United States based carriers. However, it is believed
that certain foreign countries use settlement rates

63
<PAGE>

to subsidize their domestic call rates. As a result, domestic customers
currently pay significantly more for an international call than they do for a
domestic long distance call. The FCC has proposed
measures intended to overhaul the system of international settlements,
although such proposals have not yet been enacted and remain subject to
modification or appeal to the courts or both. Additionally, recent worldwide
trade negotiations may have a significant impact on settlement rates.

The Company believes that the average cost of international telephone calls
will be reduced, and anticipates further international opportunities will be
created as a result of recent worldwide trade negotiations. On February 15,
1997, representatives of 70 countries, including the United States, finalized
the World Trade Organization ("WTO") Basic Telecommunications Agreement ("WTO
Agreement"), a compact addressing market access, investment and pro-
competitive regulatory principles in areas currently generating over 95% of
the world's telecommunications revenue. The WTO Agreement takes effect January
1, 1998. Among other things, the agreement provides U.S. companies market
access for local, long distance and international service in 53 historically
monopolized countries through any means of network technology, either as a
facilities-based provider or as a reseller of existing network capacity. The
countries providing market access for telecommunications services as a result
of the WTO Agreement account for 99% of the world's telecommunications
revenue. Although some countries have reserved specific exceptions, the
agreement generally ensures that U.S. companies may acquire, establish, or
hold a significant stake in telecommunications companies around the world, and
that foreign companies may acquire, establish or hold such a stake in U.S.
telecommunications companies. Additionally, pro-competitive regulatory
principles based largely upon the Telecom Act of 1996 were adopted by 65
countries within the WTO Agreement. U.S. companies will be able to enforce
these principles, as well as the WTO Agreement's market access and investment
commitments, at the WTO and through enabling legislation in the U.S. The
Company expects to benefit from the anticipated effects of the WTO Agreement,
but cannot predict where or when such opportunities may present themselves.

STATE REGULATION

The Company's intrastate long distance telecommunications operations are
subject to various state laws and regulations including, in many
jurisdictions, certification and tariff filing requirements. Generally, the
Company must obtain and maintain certificates of authority from regulatory
bodies in most states in which it offers intrastate services. In most of these
jurisdictions the Company must also file and obtain prior regulatory approval
of tariffs for its intrastate services. Certificates of authority can
generally be conditioned, modified, canceled, terminated, or revoked by state
regulatory authorities for failure to comply with state law and/or the rules,
regulations, and policies of the state regulatory authorities. Fines and other
penalties also may be imposed for such violations. The Company is currently
authorized to provide intrastate services in 47 states, and has a pending
application for authority to provide intrastate services in one additional
state. The Company intends to have authority in all states where competition
is allowed.

Those states that permit the offering of intrastate/intra-LATA service by
interexchange carriers generally require that end users desiring to use such
services dial special access codes. Historically, this has put the Company at
a competitive disadvantage compared with LECs whose customers can make
intrastate/intra-LATA calls simply by dialing 1 plus the desired number. If a
long distance carrier's customer attempts to make an intra-LATA call by simply
dialing 1 plus the desired number, the call will be routed to and completed by
the LEC. Regulatory agencies in a number of states have issued decisions that
would permit the Company and other interexchange carriers to provide intra-
LATA calling on a 1 + basis. Further, the Telecom Act of 1996 requires in most
cases that the RBOCs provide such dialing parity coincident to their providing
in-region inter-LATA services. The Company expects to benefit from the ability
to offer 1 + intra-LATA services in states that allow this type of dialing
parity.

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<PAGE>

LOCAL REGULATION

The Company is occasionally required to obtain street use and construction
permits and licenses and/or franchises to install and expand its fiber optic
network using municipal rights-of-way. Termination of the existing franchise
or license agreements prior to their expiration dates or a failure to renew
the franchise or license agreements and a requirement that the Company remove
its facilities or abandon its network in place could have a material adverse
effect on the Company. In some municipalities where the Company has installed
or anticipates constructing networks, it will be required to pay license or
franchise fees based on a percentage of gross revenue or on a per linear foot
basis. There can be no assurance that, following the expiration of existing
franchises, fees will remain at their current levels. In addition, the Company
could be at a competitive disadvantage if its competitors do not pay the same
level of fees as the Company. However, the Telecom Act of 1996 requires
municipalities to manage public rights-of-way in a competitively neutral and
non-discriminatory manner.

OTHER

The Company monitors compliance with federal, state and local regulations
governing the discharge and disposal of hazardous and environmentally
sensitive materials, including the emission of electromagnetic radiation. The
Company believes that it is in compliance with such regulations, although
there can be no assurance that any such discharge, disposal or emission might
not expose the Company to claims or actions that could have a material adverse
effect on the Company.

65
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of Qwest, their ages and positions with
Qwest, and brief biographies are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Philip F. Anschutz....... 57 Director and Chairman
Joseph P. Nacchio........ 48 Director, President and Chief Executive Officer
Robert S. Woodruff....... 48 Director, Executive Vice President--Finance and
Chief Financial Officer and Treasurer
Cannon Y. Harvey......... 56 Director
Richard T. Liebhaber..... 62 Director
Douglas L. Polson........ 55 Director
Craig D. Slater.......... 40 Director
Joseph T. Garrity........ 45 Secretary
Richard L. Smith......... 36 Vice President and Controller
Jordan L. Haines......... 69 Director
W. Thomas Stephens....... 54 Director
</TABLE>
Messrs. Haines and Stephens were appointed to serve as independent directors
effective immediately upon completion of the Initial Public Offering.

OTHER MANAGEMENT

In addition, management of QCC includes the individuals set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Anthony J. Brodman...... 55 Senior Vice President--Strategy and Planning
Gregory M. Casey........ 38 Senior Vice President--Carrier Markets
Stephen M. Jacobsen..... 38 Senior Vice President--Consumer Markets
Daniel I. O'Callaghan... 54 Senior Vice President--Construction
A. Dean Wandry.......... 56 Senior Vice President--New Business Development
</TABLE>

Philip F. Anschutz has been a Director and the Chairman of the Board of
Qwest since February 1997. He has been a Director and Chairman of the Board of
QCC since November 1993. He has been a Director and Chairman of the Board of
Anschutz Company ("AC"), Qwest's parent, for more than five years, and a
Director and Chairman of the Board of The Anschutz Corporation ("TAC"), a
wholly owned subsidiary of Anschutz Company, for more than five years. Since
the merger of Southern Pacific Rail Corporation ("SPRC") and Union Pacific
Corporation ("UP") in September 1996, Mr. Anschutz has served as Vice-Chairman
of UP. Prior to the merger, Mr. Anschutz was a Director of SPRC from June 1988
to September 1996, Chairman of SPRC from October 1988 to September 1996, and
President and Chief Executive Officer of SPRC from October 1988 to July 1993.
He also has been a Director of Forest Oil Corporation since 1995.

Joseph P. Nacchio became Director, President and Chief Executive Officer of
Qwest in February 1997, having been appointed to the same positions at QCC in
January 1997. Prior to joining the Company he was Executive Vice President of
AT&T Corp.'s ("AT&T") Consumer and Small Business Division since January 1996.
In that capacity he was responsible for AT&T's core consumer long distance
business, and AT&T's DirecTV, AT&T Alascom and Language Line businesses. He
was also responsible for marketing and sales targeted at all consumer and
small businesses in the United States. In 1994 and 1995 Mr. Nacchio was
President of AT&T's Consumer Communications Services long distance, a winner
of the Malcolm Baldrige National Quality Award for Excellence. From November
1991 until August 1994, Mr. Nacchio was President of AT&T's Business
Communications Services unit focused on the long distance communications needs
of business customers. Since joining AT&T in June 1970 he held assignments in
network operations, engineering, marketing and sales. Mr. Nacchio earned an
M.S. degree in management from the Massachusetts Institute of Technology in
the Sloan Fellows Program. He also received an M.B.A. degree and a B.S. degree
in electrical engineering, both from New York University. He has been a
Director of Internet Communications Corporation since May 1997.

66
<PAGE>

Robert S. Woodruff became a Director and Executive Vice President--Finance
and Chief Financial Officer of Qwest in February 1997. He served as interim
Chief Operating Officer of Qwest and QCC from November 1996 through April
1997. He has served as a Director of QCC since December 1996. He became
Executive Vice President--Finance, Chief Financial Officer and Treasurer of
QCC in August 1994. He serves as a Director of FSI Acquisition Corp.,
Government Communications Inc., Qwest Transmission Inc., Qwest Properties,
Inc., and U.S. TeleSource, Inc., all of which are wholly owned subsidiaries of
QCC. He is also Sole Administrator of QCC's Mexican subsidiaries, Opticom,
S.A. de C.V., Servicios Derecho de Via, S.A. de C.V., and S.P. Servicios
Mexico, S.A. de C.V. Prior to joining the Company he had been a partner in the
accounting firm of Coopers & Lybrand since 1984, where his responsibilities
included providing services to communications companies. Mr. Woodruff received
a B.B.A. degree in accounting, with honors, from the University of Wisconsin.

Cannon Y. Harvey has been a Director of Qwest since February 1997 and a
Director of QCC since December 1996. He has been President and Chief Operating
Officer of both AC and TAC since December 1996. From February 1995 until
September 1996 he served as Executive Vice President--Finance and Law of SPRC;
from September 1993 to February 1995 he served as Senior Vice President and
General Counsel of SPRC; from May 1993 to September 1993 he served as Vice
President--Finance and Law and General Counsel of SPRC. Prior to joining SPRC,
Mr. Harvey was a Partner in the law firm of Holme Roberts & Owen LLP for more
than five years.

Richard T. Liebhaber has been a Director of Qwest since February 1997. He
has been a Managing Director of Veronis, Suhler & Associates, Inc., the New
York media merchant banking firm, since June 1, 1995. Mr. Liebhaber has been a
member of the board of directors of Objective Communications, Inc. since
August 1994, the board of directors of Alcatel Network Systems, Inc. since
June 1995, the board of directors of Geotek Communications, Inc. since April
1995, the board of directors of Advanced Network Services, Inc. (America
OnLine, Inc.) since July 1996, the board of directors of Internet
Communications Corporation since May 1997, and the board of directors of
Scholz Master Builders since December 1985. From December 1985 to his
retirement in May 1995, Mr. Liebhaber served as Executive Vice President of
MCI Communications Corporation and as a member of its Management Committee.
Mr. Liebhaber was a member of the board of directors of MCI Communications
Corporation from July 1992 until his retirement in May 1995.

Douglas L. Polson has been a Director of Qwest since February 1997 and a
Director of QCC for more than five years. He has been a Director and Vice
President--Finance of both AC and TAC for more than five years. He was a
Director of SPRC from June 1988 to September 1996; Vice Chairman of SPRC from
June 1988 to September 1996; and a Vice President of SPRC from October 1988 to
September 1996.

Craig D. Slater has been a Director of Qwest since February 1997 and a
Director of QCC since November 1996. He has been Vice President--Acquisitions
and Investments of both AC and TAC since August 1995 and Corporate Secretary
of AC and TAC from September 1991 to October 1996. Mr. Slater held various
other positions with AC and TAC from 1988 to 1995. He has been a Director of
Forest Oil Corporation since 1995 and Internet Communications Corporation
since 1996.

Joseph T. Garrity has been Secretary of Qwest since February 1997 and
Secretary of QCC since November 1996. He is also Senior Director--Legal,
Regulatory and Legislative Affairs of QCC since November 1996 and was
Director--Regulatory and Legislative Affairs of QCC from March 1995 to
November 1996. Prior to joining the Company, from 1992 to March 1995, Mr.
Garrity was Senior Attorney with MCI Telecommunications Corporation; and from
1991 to 1992 he was President of Garrity, Inc. and Joseph T. Garrity, P.C.,
where he was an attorney and consultant in the areas of domestic and
international telecommunications. From 1988 to 1991 he was Counsel and
Assistant Secretary to Jones International, Ltd., Jones Intercable, Inc. and
Jones Spacelink, Ltd. and from 1989 to 1991 was President, Jones Programming
Services, Inc. He has B.S. and M.S. degrees from Northwestern University and a
J.D. degree from DePaul University College of Law.

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<PAGE>

Richard L. Smith became Vice President and Controller of Qwest in February
1997 and of QCC in October 1995. Prior to becoming Controller for QCC, he had
been the Director of Financial Operations for QCC since November 1993. From
1989 through October 1993, Mr. Smith served as Vice President of Finance for
Centrex Equipment Associates, Inc., an interconnect company. He was Controller
of Convenience Video Movies, Inc., a national distribution company, from 1987
to 1989 and was a Senior Accountant with Coopers & Lybrand from 1983 to 1987.
Mr. Smith received a B.S. degree in accounting from San Diego State
University.

Jordan L. Haines was appointed a Director of Qwest effective immediately
upon completion of the Initial Public Offering. He was Chairman of the Board
of Fourth Financial Corporation, a Kansas-based bank holding company, and its
subsidiary, Bank IV Wichita, N.A., from 1983 until his retirement in 1991. He
has been a member of the Board of Directors of KN Energy, Inc. since 1983 and
a Director of Forest Oil Corporation since 1996. Mr. Haines will serve as a
member of the Audit Committee.

W. Thomas Stephens was appointed a Director of Qwest effective immediately
upon completion of the Initial Public Offering. He served from 1986 until his
retirement as President and Chief Executive Officer of Manville Corporation,
an international manufacturing and resources company. He also served as a
member of the Manville Corporation Board of Directors from 1986 to 1996, and
served as Chairman of the Board from 1990 to 1996. Mr. Stephens has been a
Director of Public Service Company of Colorado since 1989, a Director of Mail
Well, Inc. since 1996, a Trustee of Eagle Picher Settlement Trust since 1996
and a Trustee of The Denver Art Museum since 1994. He will serve as a member
of the Audit Committee.

Anthony J. Brodman joined QCC in 1989 and has been Senior Vice President--
Strategy and Planning since 1995. From 1994 to June 1995 he served as Vice
President--Strategy, Planning and Public Relations and from 1989 to 1994 was
Vice President--Sales and Marketing. Prior to joining QCC, he held senior
level marketing and sales positions from 1973 to 1989 with Sprint. He has 11
years of experience in field and headquarters marketing positions with Pacific
Telephone. Mr. Brodman holds a degree from DeAnza College and attended
Northrop Institute of Technology and San Francisco State University.

Gregory M. Casey became Senior Vice President--Carrier Markets of QCC in
June 1997. In this capacity, he is responsible for all of Qwest's carrier
marketing and sales programs. Prior to joining QCC, Mr. Casey was, since 1996,
Vice President of Carrier Relations and Regulatory Affairs at LCI
International, with responsibility for managing relationships with RBOCs and
LECs and negotiating interconnection arrangements and wholesale pricing for
resale of local service. From 1991 to 1996, he was employed by ONCOR
Communications Inc., where he served as Senior Vice President of Regulatory
Affairs and Telephone Company Relations. Prior to joining ONCOR, he was Senior
Vice President and General Counsel for Telesphere International Inc. Mr. Casey
holds a B.A. degree in political science from the University of Connecticut
and a J.D. degree from DePaul University College of Law.

Stephen M. Jacobsen became Senior Vice President--Consumer Markets of QCC in
March 1997. In this capacity, he is responsible for all of QCC's consumer
marketing and sales programs. Prior to joining QCC, Mr. Jacobsen was Regional
Vice President--Consumer and Small Business for AT&T in Southern California
and Nevada since 1996, with responsibility for all marketing functions for
consumer and small business customers in those geographic areas. During his
nearly sixteen-year career at AT&T, Mr. Jacobsen held key managerial positions
in the network services division, including responsibility for AT&T's network
operations center in the western region as well as positions in sales,
marketing and product management, Mr. Jacobsen holds an M.S. degree in
management from the Massachusetts Institute of Technology in the Sloan Fellows
Program and a B.S.B.A. degree from the University of Arizona.

Daniel I. O'Callaghan became Senior Vice President--Construction for QCC in
November 1994. From 1989 to September 1994 he was Vice President--Construction
for QCC and from 1988 to 1989 he was Vice President--Operations for QCC. He
has been with QCC since its inception. From 1964 to 1988 he was with Southern
Pacific Lines and last served as Assistant Chief Engineer. He has extensive

68
<PAGE>

experience in construction, engineering, operations, facilities, planning and
project management. He has the direct responsibility for managing all of QCC's
fiber optic construction projects. Mr. O'Callaghan holds a B.S. degree in
mathematics and physics from the University of San Francisco, a B.S. degree in
engineering from Santa Clara University, and an M.B.A., with honors, from St.
Mary's College. He is a professional civil engineer in Louisiana, Colorado and
California, and is the qualified individual for the contractor's licenses of
SP Construction Services in California, Arizona and Utah.

A. Dean Wandry became Senior Vice President--Cable & Access Services for QCC
in November 1994 and Senior Vice President--New Business Development for QCC
in December 1995. In 1981 Mr. Wandry formed Citation Cable Systems Limited,
which merged into Fanch Communications, Inc. in 1986. Following the merger, he
served as Vice President--Operations until he joined QCC. He joined Bayly
Corp., a multinational apparel manufacturer, in 1967 and served as President
of the Sales and Marketing Division from 1977 to 1981. He holds a B.S. degree
in economics from the University of Colorado.

EXECUTIVE COMPENSATION

The following table summarizes the compensation paid or accrued to Qwest's
chief executive officer and four other most highly compensated executive
officers of Qwest and its operating subsidiaries (the "Named Executives")
during the fiscal years ended December 31, 1996, 1995, and 1994. The position
identified in the table for each person is that person's current position at
Qwest unless otherwise indicated.

Mr. Joseph P. Nacchio became President and Chief Executive Officer of Qwest
effective January 4, 1997. His employment agreement is described below the
table.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------
OTHER
ANNUAL ALL OTHER
NAME/PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION COMPENSATION
- ----------------------- ---- -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Robert S. Woodruff,
Interim Chief 1996 $182,200 $25,000 $ -- $ 5,466(1)
Operating Officer,
Executive Vice 1995 167,766 16,500 -- 1,671
President--Finance and
Chief Financial Officer
and Treasurer 1994 65,683(2) -- -- --
Anthony Brodman, Senior
Vice 1996 152,333 30,000 -- 7,945(1)
President--Strategy and 1995 130,270 11,634 15,752(3) 7,163
Planning (QCC) 1994 112,140 -- 2,083(3) 62,602
A. Dean Wandry, Senior
Vice 1996 148,300 30,000 -- 7,725(1)
President--New Business 1995 141,866 14,000 -- 2,310
Development (QCC) 1994 45,141(4) -- -- --
Joseph DePetro, Vice
President-- 1996 130,083 -- 48,337(5) 7,203(1)
Sales and Marketing
(QCC) 1995 120,000 -- 45,634(3) 6,712
1994 99,897 -- 50,403(6) 62,313
Douglas H. Hanson, 1996 193,557 -- -- 128,420(8)
former
President and Chief 1995 200,040 20,004 -- 8,240
Executive
Officer (QCC)(7) 1994 195,865 -- -- 79,001
Peter R. Geddis, former
Executive 1996 157,150 -- -- 24,147(10)
Vice President (QCC) (9) 1995 188,127 18,504 239,680(11) 9,738
1994 180,865 -- 239,680(11) 75,000
</TABLE>
- --------
(1) The amount shown represents QCC's contribution to QCC's 401(k) plan.
(2) Mr. Woodruff began his employment with QCC in August 1994 and amounts
disclosed for Mr. Woodruff for 1994 represent compensation paid after
that date.

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<PAGE>

(3) The amount shown represents commissions.
(4) Mr. Wandry began his employment with QCC in September 1994 and amounts
disclosed for Mr. Wandry for 1994 represent compensation paid after that
date.
(5) The amount shown represents commissions. In August 1996, QCC extended a
loan to Mr. DePetro in the principal amount of $31,850 with interest at
5% per year and secured by a deed of trust on his principal residence.
The principal amount is forgiven in annual increments of $7,963 on
December 31, 1996 through 1999. Mr. DePetro pays interest on the
outstanding principal balance on the first day of each month. If Mr.
DePetro terminates his employment voluntarily or if QCC terminates his
employment on account of wilful misconduct, QCC may declare the then
outstanding principal amount and accrued interest due and payable within
45 days after he terminates employment. If his employment terminates for
any other reason, the outstanding principal balance will be forgiven.
(6) The amount shown represents commissions ($38,577) and QCC's forgiveness
of a portion of a loan ($11,826).
(7) Mr. Hanson resigned his position effective November 11, 1996. In
connection with his termination, Qwest and Mr. Hanson entered into a
severance agreement that is described under "--Employment Contracts and
Termination of Employment and Change-in-Control Arrangements," below.
(8) The amount shown represents QCC's contribution to QCC's 401(k) Plan
($9,000) and a payment for accrued but unused vacation ($119,420). For a
description of the severance payments paid or payable to Mr. Hanson, see
"--Employment Contracts and Termination of Employment and Change-In-
Control Arrangements," below.
(9) Mr. Geddis terminated employment as an executive officer effective July
1, 1996. He continued to perform services for QCC on a reduced-time basis
through December 31, 1996.
(10) The amount shown represents QCC's contribution to QCC's 401(k) Plan
($9,215) and QCC's payment for accrued but unused vacation time ($14,932)
upon his termination of employment. In January 1997, QCC paid Mr. Geddis
the sum of $450,000 in full satisfaction of Mr. Geddis' interest in the
Growth Share Plan, which is described below.
(11) The amount shown represents QCC's forgiveness of a loan.

CEO EMPLOYMENT AGREEMENT

Qwest and Joseph P. Nacchio entered into an employment agreement dated as of
December 21, 1996 and amended as of January 3, 1997, pursuant to which Mr.
Nacchio joined Qwest as its President and Chief Executive Officer effective
January 4, 1997 for a term through the close of business on December 31, 2001,
unless terminated earlier by either party. The agreement provides for an
annual base salary of $600,000, a $300,000 bonus for 1997, and, unless Qwest
makes an initial public offering of its stock in 1998, a $300,000 bonus for
1998. Mr. Nacchio may participate in the employee benefit plans available to
Qwest's senior executives according to the plans' terms and conditions. Under
the agreement, Mr. Nacchio has been granted 300,000 growth shares under
Qwest's Growth Share Plan, with a five year performance cycle commencing
January 1, 1997 and a "beginning company value" of $1 billion. See "--Growth
Share Plan." Currently, the agreement provides generally that the growth
shares will vest in 20% increments on each January 1 beginning January 1,
1998. The growth share agreement between the Company and Mr. Nacchio provides
for terms that are different from the terms of the Growth Share Plan in
certain respects. Following the completion of the Initial Public Offering, Mr.
Nacchio may elect to receive payment for up to 20% of his vested growth shares
in shares of Common Stock; the growth shares for which he has received payment
will be canceled. The number of growth shares granted to Mr. Nacchio are
subject to adjustment upon changes in the Company's capital structure in
connection with mergers and other reorganizations. If Mr. Nacchio's employment
is terminated for good reason (generally, resignation after a reduction in
title or responsibility) or other than for cause (as defined below), he will
vest in one-twelfth of the 20% of growth shares subject to annual vesting for
the year of termination for each full month of employment in such calendar
year. A change in control (as defined in the employment agreement) will not
result in full vesting of, or payment for, the growth shares unless Mr.
Nacchio is terminated without cause or resigns for good reason after the
change in control. If his employment is terminated for cause, he will be paid
for his vested growth shares based on the value of the Company as of the end
of the immediately preceding calendar year. Upon payment of certain dividends,
the growth shares will vest 100% and Mr. Nacchio will be paid for a portion of
the growth shares. Termination of the Plan will not be a "triggering event,"
see "--Growth Share Plan," with respect to Mr. Nacchio's growth shares.

The Company has entered into an amendment to the growth share agreement with
Mr. Nacchio to provide that (1) following completion of the Initial Public
Offering, the value of the growth shares is capped at a value generally
determined by the $22.00 per share price of the Common Stock in the

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<PAGE>

Initial Public Offering and (2) the performance cycle will end on a date in
2001 selected by the Company in its sole discretion and communicated to Mr.
Nacchio in writing. The Company has granted Mr. Nacchio an option under the
Company's Equity Incentive Plan to purchase three million shares of Common
Stock. See "--Equity Incentive Plan." The exercise price is $22.00 per share.
The option will vest 20% per year beginning at the same time as the growth
shares and will become fully vested upon Mr. Nacchio's death, disability or
retirement. If Mr. Nacchio resigns for good reason (as defined in the growth
share agreement) or if the Company terminates his employment other than for
cause, he will vest in an amount of one-twelfth of the 20% increment scheduled
to vest for the year of termination for each full month of employment with the
Company during such year. If the Company terminates his employment without
cause or if he resigns for good reason (as defined in the employment
agreement, provided that for this purpose the occurrence of a change in
control by itself is not good reason), in each case following a change in
control, the option will become fully vested. If Mr. Nacchio's employment
terminates for any other reason, he will forfeit the unvested portion of his
option and retain the vested portion of his option, provided that if his
employment is terminated for cause, he can exercise the vested portion of the
option only until the first to occur of (1) the date that is six months after
the day after his termination or (2) June 30, 2003. He can exercise the vested
portions of the option at any time before the option expires. Generally, the
option will terminate and expire on June 30, 2003.

The employment agreement also provides that in order to compensate
Mr. Nacchio for certain benefits from his former employer, AT&T, that Mr.
Nacchio may lose or forfeit as a result of his termination of employment and
commencement of employment with Qwest, Qwest will pay him $10,735,861, as
adjusted (the "equalization payment"). The equalization payment is to be made
in three installments. The first installment of $7,232,000 has been paid. The
remaining two installments are scheduled to be paid on each of January 1, 1998
($1,469,861) and 1999 ($2,034,000), with annual interest at the rate of 5%
from January 7, 1997 to the date of payment. If Mr. Nacchio's employment is
terminated for cause (including any willful misconduct materially detrimental
to the Company, felony conviction, or nonfeasance with respect to duties set
forth in the employment agreement) on or before December 31, 1999, the
agreement provides that he will repay to Qwest a portion of the equalization
payment previously paid. If a termination for cause occurs after December 31,
1999, the equalization payment will not be repaid. If Qwest terminates Mr.
Nacchio's employment other than for cause or if Mr. Nacchio resigns for good
reason, which for this purpose includes a change in control of Qwest or
certain other events, Qwest will be obligated to make certain payments to him,
including an amount equal to two times his base salary at the rate in effect
on the date of employment termination and any installments of the equalization
payment that have not yet been made, with interest. Mr. Nacchio will also be
entitled to continuation of certain benefits, including welfare benefits and
participation in the Growth Share Plan for a two-year period following
termination. For this purpose, change in control means the acquisition of 20%
or more of Qwest by an individual, entity (not controlled by Philip F.
Anschutz) or group if the new acquirors own a larger percentage of Qwest than
entities controlled by Philip F. Anschutz. The agreement provides that if Mr.
Nacchio receives any payments upon a change in control that are subject to the
excise tax of section 4999 of the Internal Revenue Code, Qwest will pay
Mr. Nacchio an amount that reimburses him in full for the excise tax.

GROWTH SHARE PLAN

The Growth Share Plan was originally adopted by QCC effective November 1,
1993. Qwest adopted, assumed, and continued the Growth Share Plan, effective
May 1, 1996. The Growth Share Plan was amended and restated in its entirety,
effective October 1, 1996 (the "October 1996 amendment and restatement"). The
October 1996 amendment and restatement provides for the grant of "growth
shares" to selected employees and directors of Qwest and certain affiliates
who can significantly affect the long-term financial success of Qwest. Growth
share grants may include additional or different terms and conditions from
those described herein. A "growth share" is a unit of value based on the
increase in value of Qwest over a specified performance cycle or other
specified

71
<PAGE>

measuring period. The value of a growth share is generally equal to (1) the
value of Qwest at or near the date of a "triggering event," as defined below,
minus (2) the value of Qwest as of a date determined by Qwest's board of
directors in its sole discretion at the time of grant of a growth share
("beginning company value"), minus (3) the value of contributions to capital
during the period beginning with the date as of which Qwest's value for
purposes of the growth share's grant is determined and ending with the date as
of which the value of the growth share is determined (the "measuring period")
together with an amount equal to 9% of each such contribution made by entities
controlled by Philip F. Anschutz, compounded annually, plus (4) dividends paid
during the measuring period, divided by (5) 10 million (the total number of
growth shares). The value of Qwest as of the last day of the measuring period
is determined by independent appraisal; provided that if all classes of
Qwest's outstanding equity securities are publicly traded and Qwest is subject
to the reporting and disclosure rules of the Securities Exchange Act, the
value of Qwest will be based on the trading price of the equity securities
over the 20 consecutive trading days ending on the last day of the measuring
period.

Payment for growth shares is generally made at the end of the performance
cycle; however, the October 1996 amendment and restatement provides that the
outstanding growth shares will be valued and payment will be made upon the
termination of the October 1996 amendment and restatement or a "change in
control" (defined below), which are referred to as "triggering events." In the
case of payments made other than at the end of a performance cycle, Qwest is
valued as of the last day of the month following the triggering event, in the
case of termination of the October 1996 amendment and restatement, and
immediately after the date of the change in control, in the case of a change
in control. Generally, payment is made in a single cash payment or in shares
of Qwest's common stock, as determined by the board, although Qwest may elect
to pay in two equal annual installments, the first installment to be made
within 30 days after the growth shares are valued and the second installment
to be made one year later with interest at the consolidated prime rate
published in The Wall Street Journal. Under the October 1996 amendment and
restatement, payment must be made in shares of Qwest's common stock if Qwest's
common stock is actively traded on an established securities market, and Qwest
is subject to the reporting and disclosure requirements of the Exchange Act.

The October 1996 amendment and restatement provides that no more than
850,000 of the 10 million growth shares will be outstanding at one time.
Growth shares generally vest at 20% for each full year of service after the
date of grant. Participants become fully vested in their outstanding growth
shares at death, disability or retirement after age 65. If a participant is
terminated for cause, he or she will forfeit all vested growth shares. A
participant who voluntarily terminates employment will forfeit 25% of his or
her vested growth shares. Different vesting arrangements may apply to
different participants. A participant who is not 100% vested at the date of a
triggering event will be paid for the vested growth shares; however, 25% of
the payment will be withheld and will be forfeited if the participant
voluntarily terminates employment. Payment will be made for the unvested
growth shares if and when they vest.

Upon a "change of control" of Qwest, the outstanding growth shares will
become fully vested. For this purpose, "change of control" is defined as
either (A) the acquisition by any individual, entity or group (as defined in
the Exchange Act), other than Anschutz Company, The Anschutz Corporation, or
any entity controlled by Philip F. Anschutz ("Anschutz Entities"), of
beneficial ownership of 20% or more of either (1) the then-outstanding shares
of Common Stock or (2) the combined voting power of the then-outstanding
voting securities of Qwest entitled to vote generally in the election of
directors and the beneficial ownership of the individual, entity or group
exceeds the beneficial ownership of the Anschutz Entities or (B) the Anschutz
Entities no longer have beneficial ownership of at least 20% of Qwest's common
stock or 20% of the combined voting power.

The October 1996 amendment and restatement provides that growth shares
granted prior to October 1, 1996, remain subject to the terms and conditions
of the Growth Share Plan that were in effect

72
<PAGE>

when the growth shares were granted, unless otherwise agreed in writing by the
Participant and Qwest. A total of 253,900 outstanding growth shares were
granted under prior versions of the Growth Share Plan (the "Prior Plan").
Those growth shares became 100% vested (if not previously vested) upon
completion of the Initial Public Offering and completion of the Initial public
Offering constituted a triggering event with respect to those growth shares,
which will result in payment by Qwest to the holders of the value of those
growth shares. Under the Prior Plan, in the event of an initial public
offering of Qwest's stock, payment may be made either in cash or in shares of
Common Stock, as determined in the sole discretion of Qwest. The October 1996
amendment and restatement provides that payment must be made in shares of
Qwest's common stock if Qwest's stock is publicly traded; completion of the
Initial Public Offering, however, did not constitute a triggering event with
respect to growth shares issued thereunder.

Up to 2,000,000 shares of Common Stock will be issuable to holders of growth
shares granted under the Prior Plan. However, the number of shares to be
issued may be reduced as follows: holders who are required to agree to refrain
from selling Common Stock for 180 days (see "Underwriting") may elect to
receive up to 10% of their growth shares in cash; and all holders may elect to
have between 28% and 50% of the growth shares in Common Stock withheld or set
aside for tax and other withholdings.

Growth shares granted under the October 1996 amendment and restatement are
not accelerated or triggered by completion of the Initial Public Offering. The
Company has entered into amendments to the growth share agreements with
participants who hold growth shares granted under the October 1996 amendment
and restatement. The amendments provide that (1) following completion of the
Initial Public Offering, the value of the growth shares are capped at a value
generally determined by the $22.00 per share price of the Common Stock in the
Initial Public Offering and (2) the performance cycle will end on a date in
2001 selected by the Company in its sole discretion and communicated to the
participant in writing. The Company has granted the participant an option
under the Company's Equity Incentive Plan to purchase a number of shares of
Common Stock equal to ten times the number of the participant's growth shares.
See "--Equity Incentive Plan." The exercise price is equal to the $22.00 price
per share in the Initial Public Offering. The options will vest 20% per year
beginning at the same time as the growth shares and will become fully vested
upon the participant's death, disability, retirement or a change in control of
the Company. The options will become exercisable at the rate of 15% per year
for each of the first four years and 40% in the fifth year, in each case, on
the date of vesting. If the participant is terminated for cause, or if the
participant voluntarily terminates employment, he will forfeit all unvested
options and the vested portion that is not exercisable. The participant may
exercise the exercisable portion of the vested options at any time before the
options expire. The options will terminate and expire at the end of the 18-
month period following the vesting of the final 20% increment, provided that
if the participant is terminated for cause, the vested and exercisable options
will terminate and expire six months after the date of termination of
employment.

The Company does not intend to grant any more growth shares.

The first growth shares were granted as of November 1, 1993. As of April 15,
1997, a total of 631,900 growth shares had been granted and were outstanding.
The following table shows the growth shares that were granted to the named
executive officers prior to 1996. All of the growth shares have a measuring
period commencing November 1, 1993, a performance cycle commencing November 1,
1993 and ending November 1, 1998, and a beginning company value of $50
million. All of the growth shares vest in annual 20% increments; the first
annual increment vested on the date shown in the table.

<TABLE>
<CAPTION>
INITIAL
GRANT NUMBER OF VESTING
NAME DATE GROWTH SHARES DATE
---- ------- ------------- -------
<S> <C> <C> <C>
Robert Woodruff................................ 8/8/94 40,000 8/8/95
Anthony Brodman................................ 11/1/93 25,000 11/1/94
A. Dean Wandry................................. 9/6/94 35,000 9/6/95
Joseph DePetro................................. 11/1/93 25,000 11/1/94
</TABLE>

73
<PAGE>

Messrs. Slater, Polson, and Liebhaber, directors of Qwest, have each been
granted a total of 20,000, 7,500, and 10,000 growth shares, respectively.

The following table shows the growth shares granted in 1996 to the named
individuals in the Summary Compensation Table:

LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NUMBER OF
NAME GROWTH SHARES PERFORMANCE PERIOD
---- ------------- ------------------
<S> <C> <C>
Anthony Brodman............................. 2,500 January 1, 1997 to
December 31, 2001
</TABLE>

The growth shares were granted as of October 1, 1996 and will vest in annual
increments of 20% on each October 1, beginning October 1, 1997. The growth
shares have a measuring period commencing November 1, 1993 and a beginning
company value of $50 million.

EQUITY INCENTIVE PLAN

The Company adopted the Qwest Communications International Inc. Equity
Incentive Plan (the "Equity Incentive Plan") effective June 23, 1997.

The Equity Incentive Plan permits the grant of non-qualified stock options,
incentive stock options, stock appreciation rights, restricted stock, stock
units and other stock grants to key employees of the Company and affiliated
companies and key consultants to the Company and affiliated companies. A
maximum of 10,000,000 shares of Common Stock may be subject to awards under
the Equity Incentive Plan. The number of shares is subject to adjustment on
account of stock splits, stock dividends and other dilutive changes in the
Common Stock. Shares of Common Stock covered by unexercised non-qualified or
incentive stock options that expire, terminate or are canceled, together with
shares of Common Stock that are forfeited pursuant to a restricted stock grant
or any other award (other than an option) under the Equity Incentive Plan or
that are used to pay withholding taxes or the option exercise price, will
again be available for option or grant under the Equity Incentive Plan.

Participation. The Equity Incentive Plan provides that awards may be made to
eligible employees and consultants who are responsible for the Company's
growth and profitability. The Company currently considers all of its employees
and consultants to be eligible for grant of awards under the Equity Incentive
Plan. As of May 31, 1997, there were approximately 950 eligible participants.

Administration. The Equity Incentive Plan is administered by the Company's
Compensation Committee (the "Committee"). The Committee must be structured at
all times so that it satisfies the "non-employee director" requirement of Rule
16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act"). To the
extent practicable, the Company intends to satisfy the similar requirement for
administration by "outside" directors under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), with respect to grants to
employees whose compensation is subject to Section 162(m) of the Code. The
Committee has the sole discretion to determine the employees and consultants
to whom awards may be granted under the Equity Incentive Plan and the manner
in which such awards will vest. Options, stock appreciation rights, restricted
stock and stock units are granted by the Committee to employees and
consultants in such numbers and at such times during the term of the Equity
Incentive Plan as the Committee shall determine, except that the maximum
number of shares subject to one or more awards that can be granted during the
term of the Equity Incentive Plan to any employee or consultant is 10,000,000
shares of Common Stock, and except that incentive options may be granted only
to employees. In granting options, stock appreciation rights, restricted stock
and stock units, the Committee will take into account such factors as it may
deem relevant in

74
<PAGE>

order to accomplish the Equity Incentive Plan's purposes, including one or
more of the following: the extent to which performance goals have been met,
the duties of the respective employees and consultants and their present and
potential contributions to the Company's success.

Exercise. The Committee determines the exercise price for each option;
however, incentive stock options must have an exercise price that is at least
equal to the fair market value of the Common Stock on the date the incentive
stock option is granted (at least equal to 110% of fair market value in the
case of an incentive stock option granted to an employee who owns Common Stock
having more than 10% of the voting power). An option holder may exercise an
option by written notice and payment of the exercise price in (i) cash or
certified funds, (ii) by the surrender of a number of shares of Common Stock
already owned by the option holder for at least six months with a fair market
value equal to the exercise price, or (iii) through a broker's transaction by
directing the broker to sell all or a portion of the Common Stock to pay the
exercise price or make a loan to the option holder to permit the option holder
to pay the exercise price. Option holders who are subject to the withholding
of federal and state income tax as a result of exercising an option may
satisfy the income tax withholding obligation through the withholding of a
portion of the Common Stock to be received upon exercise of the option.
Options, stock appreciation rights, stock units and restricted stock awards
granted under the Equity Incentive Plan are not transferable other than by
will or by the laws of descent and distribution.

Change in Control. All awards granted under the Equity Incentive Plan shall
immediately vest upon any "change in control" of the Company unless provided
otherwise by the Committee at the time of grant. A "change in control" occurs
if (i) 20% or more of the Company's voting stock or outstanding stock is
acquired by persons or entities (other than any entity controlled by Philip F.
Anschutz ("Anschutz Entities")) and the beneficial ownership so acquired
exceeds the beneficial ownership of the Anschutz Entities or (ii) the Anschutz
Entities no longer have beneficial ownership of at least 20% of the Company's
voting stock or outstanding stock.

Merger and Reorganization. Upon the occurrence of (i) the reorganization
(other than a bankruptcy reorganization), merger or consolidation of the
Company (other than a reorganization, merger or consolidation in which the
Company is the continuing company and that does not result in any change in
the outstanding shares of Common Stock), (ii) the sale of all or substantially
all of the assets of the Company (other than a sale in which the Company
continues as a holding company of an entity that conducts the business
formerly conducted by the Company), or (iii) the dissolution or liquidation of
the Company, all outstanding options will terminate automatically when the
event occurs if the Company gives the option holders 30 days' prior written
notice of the event. Notice is also given to holders of other awards. Notice
is not required for a merger or consolidation or for a sale if the Company,
the successor, or the purchaser makes adequate provision for the assumption of
the outstanding options or the substitution of new options or awards on terms
comparable to the outstanding options or awards. When the notice is given, all
outstanding options fully vest and can be exercised prior to the event and
other awards become exercisable and payable.

Amendment and Termination. The Board may amend the Equity Incentive Plan in
any respect at any time provided shareholder approval is obtained when
necessary or desirable, but no amendment can impair any option, stock
appreciation rights, awards or units previously granted or deprive an option
holder, without his or her consent, of any Common Stock previously acquired.
The Equity Incentive Plan will terminate in 2007 unless sooner terminated by
the Board.

Federal Income Tax Consequences of Exercise of Options Under the Equity
Incentive Plan. When a non-qualified stock option is granted, there are no
income tax consequences for the option holder or the Company. When a non-
qualified stock option is exercised, in general, the option holder recognizes
compensation equal to the excess of the fair market value of the Common Stock
on

75
<PAGE>

the date of exercise over the exercise price. If, however, the option holder
exercises the non-qualified option within six months after it was granted and
if the sale of the Common Stock at a profit would subject the option holder to
liability under Section 16(b) of the Exchange Act ("Section 16(b)"), the
option holder will recognize compensation income equal to the excess of (i)
the fair market value of the Common Stock on the earlier of the date that is
six months after the date of exercise or the date the option holder can sell
the Common Stock without Section 16(b) liability over (ii) the exercise price.
The option holder can make an election under section 83(b) of the Code to
measure the compensation as of the date the non-qualified option is exercised.
The compensation recognized by an employee is subject to income tax
withholding. The Company is entitled to a deduction equal to the compensation
recognized by the option holder for the Company's taxable year that ends with
or within the taxable year in which the option holder recognized the
compensation, assuming the compensation amounts satisfy the ordinary and
necessary and reasonable compensation requirements for deductibility.

When an incentive stock option is granted, there are no income tax
consequences for the option holder or the Company. When an incentive option is
exercised, the option holder does not recognize income and the Company does
not receive a deduction. The option holder, however, must treat the excess of
the fair market value of the Common Stock on the date of exercise over the
exercise price
as an item of adjustment for purposes of the alternative minimum tax. If the
option holder makes a "disqualifying disposition" of the Common Stock
(described below) in the same taxable year the incentive stock option was
exercised, there are no alternative minimum tax consequences.

If the option holder disposes of the Common Stock after the option holder
has held the Common Stock for at least two years after the incentive stock
option was granted and one year after the incentive stock option was
exercised, the amount the option holder receives upon the disposition over the
exercise price is treated as long-term capital gain for the option holder. The
Company is not entitled to a deduction. If the option holder makes a
"disqualifying disposition" of the Common Stock by disposing of the Common
Stock before it has been held for at least two years after the date the
incentive option was granted and one year after the date the incentive option
was exercised, the option holder recognizes compensation income equal to the
excess of (i) the fair market value of the Common Stock on the date the
incentive option was exercised or, if less, the amount received on the
disposition over (ii) the exercise price. At present, the Company is not
required to withhold income or other taxes. The Company is entitled to a
deduction equal to the compensation recognized by the option holder for the
Company's taxable year that ends with or within the taxable year in which the
option holder recognized the compensation, assuming the compensation amounts
satisfy the ordinary and necessary and reasonable compensation requirements
for deductibility.

The Equity Incentive Plan provides that option holders are responsible for
making appropriate arrangements with the Company to provide for any additional
withholding amounts. Furthermore, the Company shall have no obligation to
deliver shares of Common Stock upon the exercise of any options, stock
appreciation rights, awards or units under the Equity Incentive Plan until all
applicable federal, state and local income and other tax withholding
requirements have been satisfied.

The Company expects to grant options to certain holders of growth shares.
See "--CEO Employment Agreement" and "--Growth Share Plan" above.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

The employment agreement between Qwest and Joseph P. Nacchio, which includes
provision for a payment if Mr. Nacchio resigns following a change in control,
is described under "--CEO Employment Agreement" above.

In November 1996 QCC extended Robert S. Woodruff an unsecured, noninterest-
bearing loan in the principal amount of $100,000. The principal amount is
forgiven in monthly increments of $2,083

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<PAGE>

beginning December 1, 1996. If Mr. Woodruff terminates employment voluntarily
or if QCC terminates his employment on account of willful misconduct, QCC may
declare the unforgiven outstanding principal amount due and payable within 45
days after the date he terminates employment. If Mr. Woodruff's employment
terminates for any other reason, the outstanding principal balance will be
forgiven. In December 1996, QCC and Mr. Woodruff entered into a letter
agreement to provide that if his employment is terminated for reasons other
than willful misconduct, he will receive either a lump sum payment equal to
one year's compensation at his then current rate or payment in accordance with
QCC's severance policy then in effect, as he elects.

Douglas H. Hanson resigned his position as President and Chief Executive
Officer of QCC effective as of November 11, 1996. QCC, The Anschutz
Corporation, Anschutz Company, and Mr. Hanson entered into an agreement (the
"Agreement") to provide for Mr. Hanson's termination. Pursuant to the
Agreement, QCC will pay Mr. Hanson $9,000,000, payable in three equal
installments. The first installment was paid January 2, 1997; the two
remaining installments are scheduled to be paid on January 2, 1998 and 1999
with accrued interest at the annual rate of 6%. Anschutz Company, Qwest's
parent, unconditionally guaranteed these payments. The Agreement provides that
QCC will continue Mr. Hanson's health, disability or life insurance coverage,
or provide comparable coverage through November 10, 1997 unless Mr. Hanson
obtains such coverage from any other source before November 10, 1997, and that
QCC will transfer to Mr. Hanson his home office computer, facsimile machine
and copying machine. As described above in the Summary Compensation Table, QCC
paid Mr. Hanson for his accrued but unused vacation time. The Anschutz
Corporation agreed to forgive the $1,000,000 outstanding amount that Mr.
Hanson owed pursuant to a promissory note in favor of The Anschutz Corporation
and to release the mortgage and deed of trust securing the promissory note.
Mr. Hanson agreed that for a period of 36 months he will not compete with QCC
by owning, operating, consulting for, or being connected in any way with any
business that competes with QCC in the construction or sale of fiber optic
systems or by soliciting or contacting QCC's customers or any person
identified as a QCC customer within twelve months before the Agreement was
signed. However, Mr. Hanson, together with his wife, children, and parents may
own up to 5% of the stock of a corporation that is a direct competitor of QCC
in the construction and sale of fiber optic cable systems. Mr. Hanson agreed
not to disclose any confidential information in connection with the
construction and sale of fiber optic cable systems for a period of 36 months
and not to disclose any other confidential information that would adversely
affect QCC or its business for six months, in both cases without QCC's prior
written permission, which QCC may withhold in its reasonable discretion. The
Agreement provides for Mr. Hanson's release of all rights under the Growth
Share Plan, see "--Growth Share Plan" above, and for the parties' mutual
releases of all claims for acts or omissions prior to the date of the
Agreement.

The Growth Share Plan provides that, upon a change in control, the
outstanding growth shares will become fully vested. See "--Growth Share Plan"
above.

The Equity Incentive Plan provides that, upon a change in control, all
awards granted under the Equity Incentive Plan will vest immediately. See "--
Equity Incentive Plan" above.

DIRECTOR COMPENSATION

Directors who are officers or employees of Qwest or any of its affiliates do
not receive compensation, except as officers or employees of Qwest or its
affiliates. Mr. Liebhaber has a consulting agreement with QCC that is
described under "Certain Transactions." The consulting agreement provides that
he will be paid an annual retainer fee of $250,000 plus reimbursement for out-
of-pocket expenses not to exceed $10,000 without QCC's prior approval. Mr.
Liebhaber agreed to waive director's fees in consideration for these payments.

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Audit Committee. The Board established an Audit Committee in May 1997 to:
(i) make recommendations concerning the engagement of independent public
accountants; (ii) review with Company management and the independent public
accountants the plans for, and scope of, the audit procedures to be utilized
and results of audits; (iii) approve the professional services provided by the
independent public accountants; (iv) review the adequacy and effectiveness of
the Company's internal accounting controls; and (v) perform any other duties
and functions required by any organization under which the Company's
securities may be listed. Cannon Y. Harvey, Jordan L. Haines and W. Thomas
Stephens are the members of the Audit Committee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company did not have a Compensation Committee during 1996. The Chairman
performed the functions of a Compensation Committee with respect to
determining compensation of senior executive officers of Qwest and QCC. In
December 1996, the board of directors of the Company's predecessor company
created a Compensation Committee and appointed Philip F. Anschutz and Cannon
Y. Harvey to serve on the committee. The Compensation Committee determines the
salaries, cash bonuses, and fringe benefits of the executive officers, reviews
the salary administration and benefit policies of the Company and administers
the Growth Share Plan and the Equity Incentive Plan.

Mr. Anschutz is a Director and Chairman of Qwest, a Director of QCC, a
Director and Chairman of Anschutz Company, Qwest's parent, and a Director and
Chairman of The Anschutz Corporation, a
subsidiary of Anschutz Company. Mr. Harvey is a Director of Qwest and QCC and
President and Chief Operating Officer of Anschutz Company and The Anschutz
Corporation.

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PRINCIPAL STOCKHOLDER

Anschutz Company, a Delaware corporation of which Mr. Philip F. Anschutz is
the direct, sole owner, owns approximately 84.8% of the outstanding shares of
Common Stock. The Company has granted a warrant to Anschutz Family Investment
Company LLC, an affiliate of Anschutz Company, to purchase 4,300,000 shares of
Common Stock. See "Certain Transactions." Anschutz Company has granted or
expects to grant from time to time security interests in all or part of its
shares of the Common Stock in connection with transactions entered into by it
or its affiliates. Although not anticipated, under certain circumstances,
shares of Common Stock could be sold pursuant to such security interests,
which could result in a change of control of the Company for purposes of
Delaware law.

CERTAIN TRANSACTIONS

The Company has easement agreements with certain railroads owned by Union
Pacific Corporation ("Union Pacific") arising from the 1996 merger between a
subsidiary of Union Pacific and Southern Pacific Rail Corporation ("Southern
Pacific"). The Company's sole beneficial owner, Mr. Philip F. Anschutz, was
the principal stockholder of Southern Pacific prior to the merger and is the
largest shareholder (holding approximately 5.2%) of Union Pacific. The
easement agreements provide for payment by the Company to Southern Pacific of
specified amounts based on miles of conduit used by the Company or sold to
third parties. The amounts paid by the Company to Southern Pacific under these
easement agreements for the years 1996, 1995 and 1994 and to reimburse
Southern Pacific for expenses related to the construction, operation and
maintenance of the Company's fiber optic system were approximately $3.5
million, $2.2 million and $0.9 million, respectively.

In October and November 1996, Union Pacific entered into agreements with the
Company to survey, construct and operate a fiber optic telecommunications
system on Union Pacific rights-of-way between Alazon, Nevada and Salt Lake
City, Utah. Fees paid or accrued by the Company during 1996 pursuant to these
agreements totaled $0.9 million.

Southern Pacific performed certain administrative functions for the Company
for which it charged the Company approximately $0.1 million for 1994. Charges
to the Company were not material in amount for each of the years 1996 and
1995. The Company provides telecommunications services to Southern Pacific.
For these services, Southern Pacific paid the Company $1.6 million, $3.6
million and $3.4 million in the years 1996, 1995 and 1994, respectively.

Certain affiliates of Anschutz Company indirectly provide facilities to the
Company at prevailing market rates. The Company rents its corporate office in
Denver, Colorado from a limited partnership in which Mr. Anschutz serves as a
general partner and indirectly holds limited partner interests and rents
certain telecommunications equipment used by the Company at its corporate
office from an affiliate of Anschutz Company. Such expenses totaled $0.3
million, $1.2 million and $1.0 million in the three months ended March 31,
1997 and the years ended December 31, 1996 and 1995, respectively, and were
not material in amount in 1994.

Affiliates of Anschutz Company incur certain costs on the Company's behalf,
including primarily insurance and corporate transportation services, and
allocate such costs to the Company based on actual usage. The cost to the
Company for such services was approximately $0.8 million, $2.1 million and
$2.5 million for the three months ended March 31, 1997 and for the years ended
December 31, 1996 and 1995, respectively, and was not material in 1994.

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The Company historically has received capital contributions and noninterest-
bearing advances from Anschutz Company and an affiliate of Anschutz Company to
fund operations. The Company
received capital contributions from Anschutz Company of $28.0 million and
$20.9 million in 1995 and 1994, respectively. Neither Anschutz Company nor any
of its affiliates made cash capital contributions to the Company during 1996.
Outstanding advances totaled $19.1 million at December 31, 1996 and
approximately $28.0 million at March 31, 1997.

Effective May 23, 1997, the Company sold to the Anschutz Family Investment
Company LLC, for $2.3 million in cash, a warrant to acquire 4,300,000 shares
of Common Stock at an exercise price of $28.00 per share, exercisable on May
23, 2000. The warrant is not transferable. Shares of Common Stock issued upon
exercise of the warrant would be subject to restrictions on sale and transfer
for two years after exercise. Anschutz Company is the manager of, and owns a
1% equity interest in, the Anschutz Family Investment Company LLC, and a
trust, of which members of Mr. Anschutz's immediate family are beneficiaries,
owns the remainder of the equity interests.

The Company has a tax sharing agreement with Anschutz Company that provides
for the allocation of tax liabilities and benefits. In general, the agreement
requires the Company to pay to Anschutz Company the applicable income taxes
for which the Company would be liable if it filed a separate return and
requires Anschutz Company to pay the Company for losses or credits which would
have resulted in a refund of taxes as if the Company had filed a separate
return. The payments under the agreement may be made in the form of cash,
setoffs, contributions to capital, dividends, notes or any combination of the
foregoing. The tax benefits payable to the Company under the existing
agreement through December 31, 1996 ($11.1 million) were forgiven.

The tax sharing agreement was amended, effective as of January 1, 1997 (the
"Effective Date"), to provide that the Company will be responsible to Anschutz
Company to the extent of income taxes for which the Company would have been
liable if it had filed a separate return after giving effect to any loss or
credit carryover belonging to the Company from taxable periods after the
Effective Date. Anschutz Company will be responsible to the Company to the
extent an unused loss or credit can be carried back to an earlier taxable
period after the Effective Date.

The ABN AMRO $100.0 million revolving credit facility and $50.0 million line
of credit are collateralized by shares owned and pledged by an affiliate of
Anschutz Company. For a description of these facilities, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources" and "Description of Certain Indebtedness."

Anschutz Company has guaranteed a QCC construction loan with an outstanding
balance at March 31, 1997 of approximately $15.0 million. The construction
loan pertains to a network construction project undertaken by QCC for an
interexchange carrier. The guarantee is limited to indemnification against
defective construction, warranty or other claims of the interchange carrier
that would reduce or eliminate the interexchange carrier's obligation to pay
QCC. In addition, Anschutz Company has guaranteed bonds totaling $175.0
million furnished by the Company to support its construction obligations under
the Frontier contract for sale of dark fiber. See "Business--The Qwest
Network--Dark Fiber and High Volume Capacity Sales." The Company has agreed to
indemnify Anschutz Company and its subsidiaries against any cost or losses
incurred by any of them as a result of their providing credit support to the
Company (in the form of collateral pledges, guarantees, bonds or otherwise).

Richard T. Liebhaber, a Director of the Company, entered into a consulting
agreement with an affiliate of Anschutz Company in December 1996 to provide
consulting services in 1997 and serve on the board of directors of Qwest and
its subsidiaries upon request. The agreement was assigned to the Company in
February 1997. Mr. Liebhaber is required under the contract to provide a
minimum of 30 days of consulting services to QCC during 1997 and will be paid
$250,000 plus out-of-pocket expenses not to exceed $10,000. Mr. Liebhaber, was
granted 10,000 growth shares, effective December 1, 1996, with a performance
cycle ending December 31, 2001. See "Management--Growth Share Plan."

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DESCRIPTION OF THE NOTES

GENERAL

The Exchange Notes will be issued under an indenture dated as of , 1997
(the "Indenture") between the Company and Bankers Trust Company, as trustee
under the Indenture (the "Trustee"). Copies of the Indenture are available
from the Company on request. For purposes of this Description of the Notes,
the term "Company" refers to Qwest Communications International Inc. and does
not include its subsidiaries except for purposes of financial data determined
on a consolidated basis. For purposes of this Description of the Notes, the
term "Notes" refers to the Exchange Notes and the Old Notes collectively. The
Exchange Notes and the Old Notes are considered collectively to be a single
class for all purposes under the Indenture, including, without limitation,
waivers, amendments, redemptions and Offers to Purchase.

The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and to all of the provisions of the Indenture, including the
definitions of certain terms therein and those terms made a part of the
Indenture by reference to the Trust Indenture Act, as in effect on the date of
the Indenture. The definitions of certain capitalized terms used in the
following summary are set forth below under "--Certain Definitions."

The Notes will be senior unsecured obligations of the Company, ranking pari
passu in right of payment with all existing and future senior unsecured
indebtedness of the Company, and will be senior in right of payment to all
existing and future subordinated indebtedness of the Company. On a pro forma
basis, at March 31, 1997, after giving effect to the Initial Public Offering
and after giving effect to the application of net proceeds from the sale of
the Old Notes, the Company would have had approximately $267.0 million of
long-term debt (including the current portion thereof).

The operations of the Company are conducted through its subsidiaries and,
therefore, the Company is dependent upon cash flow from those entities to meet
its obligations. The Company's subsidiaries will have no direct obligation to
pay amounts due on the Notes and currently have no obligation to guarantee the
Notes. As a result, the Notes effectively will be subordinated to all existing
and future third-party indebtedness and other liabilities of the Company's
subsidiaries (including trade payables). As of March 31, 1997, on a pro forma
basis after giving effect to the sale of the Old Notes and the application of
a portion of the proceeds thereof to repay certain indebtedness of Qwest's
subsidiaries, the total liabilities of Qwest's subsidiaries (after elimination
of loans and advances by Qwest to its subsidiaries) would have been
approximately $142.8 million, of which approximately $17.0 million in
indebtedness would have been secured by certain assets of the borrowing
subsidiaries. The Company expects that it or its subsidiaries will incur
additional indebtedness in the future. Any rights of the Company and its
creditors, including the holders of Notes, to participate in the assets of any
of the Company's subsidiaries upon any liquidation or reorganization of any
such subsidiary will be subject to the prior claims of that subsidiary's
creditors (including trade creditors). In addition, the Company's operations
have generated operating losses in recent years, and there can be no assurance
that the Company will be able to achieve or sustain operating profitability,
or generate sufficient positive cash flow to pay the principal of and interest
on the Notes. See "Risk Factors--Holding Company Structure; Effective
Subordination of the Notes," "Risk Factors--High Leverage; Ability to Service
Indebtedness," and "Risk Factors-- Operating Losses and Working Capital
Deficits."

PRINCIPAL, MATURITY AND INTEREST

The Notes will be limited in aggregate principal amount to $250 million and
will mature on April 1, 2007. Interest on the Notes will accrue at the rate of
10 7/8% per annum and will be payable semiannually in arrears on April 1 and
October 1 of each year, commencing October 1, 1997. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.

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Principal of, premium, if any, and interest on the Notes will be payable, and
the Notes may be exchanged or transferred, at the office or agency of the
Company, which, unless otherwise provided by the Company, will be the offices
of the Trustee. At the option of the Company, interest may be paid by check
mailed to the registered holders at their registered addresses. The Notes will
be issued without coupons and in fully registered form only, in minimum
denominations of $1,000 and integral multiples thereof. The Notes will be
issued only against payment in immediately available funds. No service charge
will be made for any registration of transfer or exchange of the Notes, but the
Company may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.

BOOK-ENTRY SYSTEM

All Exchange Notes will be represented by permanent Global Notes in fully
registered form without coupons (the "Global Notes"), which will be deposited
with the Trustee as custodian for the Depository and registered in the name of
the Depository or of a nominee of the Depository.

Upon issuance of a Global Note, the Depository will credit, on its internal
system, the respective amount of the individual beneficial interests in the
Global Note to persons who have accounts with the Depository ("Participants").
Such accounts initially were designated by or on behalf of the Initial
Purchasers. Ownership of beneficial interests in the Global Note will be shown
on, and the transfer of such beneficial interests will be effected only
through, records maintained by the Depository or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons other than Participants). Holders may hold their interests
in the Global Note directly through the Depository if they are Participants, or
indirectly through organizations which are Participants.

So long as the Depository or its nominee is the registered owner of a Global
Note, the Depository or such nominee, as the case may be, will be considered
the sole owner of the Exchange Notes represented by the Global Note for all
purposes under the Indenture and the Exchange Notes. Accordingly, beneficial
owners of an interest in the Global Note must rely on the procedures of the
Depository, and if such person is not a participant, on the procedures of the
Participant through which such person owns its interest, to exercise any rights
and fulfill any obligations of a holder under the Indenture. No beneficial
owner of an interest in the Global Note will be able to transfer that interest
except in accordance with the Depository's applicable procedures, in addition
to those provided for in the Indenture.

Payments of the principal of, premium, if any, and interest on, the Global
Notes will be made to the Depository or its nominee, as the case may be, as the
registered owner thereof. Neither the Company, the Trustee or any paying agent
will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial interests in the Global
Notes or for maintaining, supervising or reviewing any records relating to such
beneficial interests. The Company expects that the Depository or its nominee,
upon receipt of any payment of principal, premium or interest in respect of the
Global Notes will credit Participants' accounts with payments in amounts
proportionate to such Participants' respective beneficial interests in the
principal amount of such Global Notes as shown on the records of the Depository
or its nominee. The Company also expects that payments by Participants to
owners of beneficial interests in the Global Notes held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers
registered in the names of nominees for such customers. Such payments will be
the responsibility of such Participants.

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The Depository has advised the Company that it will take any action
permitted to be taken by a holder of Exchange Notes (including the
presentation of Old Notes for exchange as described below) only at the
direction of one or more Participants to whose accounts interests in the
Global Notes is credited and only in respect of such portion of the aggregate
principal amount of Exchange Notes, as the case may be, as to which such
Participant or Participants has or have given such direction.

The Depository has advised the Company as follows: The Depository is a
limited purpose trust company organized under the laws of the State of New
York, a "banking organization" within the meaning of New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. The Depository
was created to hold securities for its Participants and facilitate the
clearance and settlement of securities transactions between Participants
through electronic book-entry changes in accounts of its Participants, thereby
eliminating the need for physical movement of certificates. Indirect access to
the Depository system is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a Participant ("Indirect Participants").

Although the Depository and its Participants are expected to follow the
foregoing procedures in order to facilitate transfers of interests in the
Global Notes among Participants, they are under no obligation to perform or
continue to perform such procedures, and such procedures may be discontinued
at any time. Neither the Company, its paying agent or the Trustee will have
any responsibility for the performance by the Depository, Participants or
Indirect Participants of their respective obligations under the rules and
procedures governing their operations.

Owners of beneficial interests in the Global Notes will be entitled to
receive Exchange Notes in definitive form ("Definitive Notes") if the
Depository is at any time unwilling or unable to continue as, or ceases to be,
a "clearing agency" registered under Section 17A of the Exchange Act, and a
successor to the Depository registered as a "clearing agency" under Section
17A of the Exchange Act is not appointed by the Company within 90 days. Any
Definitive Notes issued in exchange for beneficial interests in the Global
Notes will be registered in such name or names as the Depository shall
instruct the Trustee. It is expected that such instructions will be based upon
directions received by the Depository from Participants with respect to
ownership of beneficial interests in the Global Notes.

In addition to the foregoing, on or after the occurrence of an Event of
Default under the Indenture, owners of beneficial interests in the Global
Notes will be entitled to request and receive Definitive Notes. Such
Definitive Notes will be registered in such name or names as the Depositary
shall instruct the Trustee.

OPTIONAL REDEMPTION

The Notes will be subject to redemption at the option of the Company, in
whole or in part, at any time or from time to time on or after April 1, 2002,
upon not less than 30 nor more than 60 days' prior notice, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest thereon (if any) to the redemption date, if
redeemed during the twelve months beginning April 1 of the years indicated
below:

<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- ----------------
<S> <C>
2002........................ 105.438%
2003........................ 103.625%
2004........................ 101.813%
2005 and thereafter......... 100.000%
</TABLE>

In addition, prior to April 1, 2000, the Company may redeem up to 35% of the
originally issued principal amount of the Notes at a redemption price equal to
110.875% of the principal amount of the

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Notes so redeemed, plus accrued and unpaid interest thereon (if any) to the
redemption date, with the net proceeds of one or more Public Equity Offerings
resulting in gross proceeds of at least $100 million in the aggregate;
provided that at least 65% of the originally issued principal amount of the
Notes would remain outstanding immediately after giving effect to such
redemption.

MANDATORY REDEMPTION

Except as set forth under "--Certain Covenants--Change of Control" and "--
Certain Covenants--Limitation on Asset Dispositions," the Company is not
required to make mandatory redemption payments or sinking fund payments with
respect to the Notes.

CERTAIN COVENANTS

The Indenture contains, among others, the following covenants:

Limitation on Consolidated Debt. (a) The Company may not, and may not permit
any Restricted Subsidiary to, Incur any Debt, unless, after giving effect to
the application of the proceeds thereof, no Default or Event of Default would
occur as a consequence of such Incurrence or be continuing following such
Incurrence and either (i) the ratio of (A) the aggregate consolidated
principal amount of Debt of the Company outstanding as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such Debt and any other Debt Incurred or repaid since such
balance sheet date and the receipt and application of the proceeds thereof, to
(B) Consolidated Cash Flow Available for Fixed Charges for the four full
fiscal quarters next preceding the Incurrence of such Debt for which
consolidated financial statements are available, determined on a pro forma
basis as if any such Debt had been Incurred and the proceeds thereof had been
applied at the beginning of such four fiscal quarters, would be less than 5.5
to 1.0 for Debt Incurred on or prior to April 1, 2000 and 5.0 to 1.0 for Debt
Incurred thereafter, or (ii) the Company's Consolidated Capital Ratio as of
the most recent available quarterly or annual balance sheet, after giving pro
forma effect to the Incurrence of such Debt and any other Debt Incurred or
repaid since such balance sheet date and the receipt and application of the
proceeds thereof, is less than 2.0 to 1.0.

(b) Notwithstanding the foregoing limitation, the Company and any Restricted
Subsidiary may Incur any and all of the following (each of which shall be
given independent effect):

(i) Debt under the Notes, the Indenture and any Restricted Subsidiary
Guarantee;

(ii) (A) Debt Incurred subsequent to March 31, 1997 under Credit
Facilities in an aggregate principal amount at any time outstanding not to
exceed $150 million plus (B) Debt Incurred subsequent to March 31, 1997
under one or more Credit Facilities that are revolving credit facilities in
an aggregate principal amount at any time outstanding not to exceed the
greater of (x) $100 million or (y) 85% of Eligible Receivables;

(iii) Purchase Money Debt, provided that the amount of such Purchase
Money Debt does not exceed 100% of the cost of the construction,
installation, acquisition or improvement of the applicable
Telecommunications Assets;

(iv) Debt owed by the Company to any Restricted Subsidiary of the Company
or Debt owed by a Restricted Subsidiary of the Company to the Company or a
Restricted Subsidiary of the Company; provided, however, that upon either
(x) the transfer or other disposition by such Restricted Subsidiary or the
Company of any Debt so permitted to a Person other than the Company or
another Restricted Subsidiary of the Company or (y) the issuance (other
than directors' qualifying shares), sale, lease, transfer or other
disposition of shares of Capital Stock (including by consolidation or
merger) of such Restricted Subsidiary to a Person other than the Company or
another such Restricted Subsidiary, the provisions of this clause (iv)
shall no longer
be applicable to such Debt and such Debt shall be deemed to have been
Incurred by the issuer thereof at the time of such transfer or other
disposition;

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(v) Debt Incurred to renew, extend, refinance, defease or refund (each, a
"refinancing") the Notes or Debt of the Company Incurred pursuant to clause
(iii) of this paragraph (b), in an aggregate principal amount not to exceed
the aggregate principal amount of and accrued interest on the Debt so
refinanced plus the amount of any premium required to be paid in connection
with such refinancing pursuant to the terms of the Debt so refinanced or
the amount of any premium reasonably determined by the board of directors
of the Company as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated repurchase, plus the expenses of the
Company Incurred in connection with such refinancing; provided, however,
that Debt the proceeds of which are used to refinance the Notes or Debt
which is pari passu to the Notes or Debt which is subordinate in right of
payment to the Notes shall only be permitted under this clause (v) if (A)
in the case of any refinancing of the Notes or Debt which is pari passu to
the Notes, the refinancing Debt is made pari passu to the Notes or
constitutes Subordinated Debt, and, in the case of any refinancing of
Subordinated Debt, the refinancing Debt constitutes Subordinated Debt and
(B) in any case, the refinancing Debt by its terms, or by the terms of any
agreement or instrument pursuant to which such Debt is issued, (x) does not
provide for payments of principal of such Debt at stated maturity or by way
of a sinking fund applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof by the Company (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of the
acceleration of any payment with respect to such Debt upon any event of
default thereunder), in each case prior to the time the same are required
by the terms of the Debt being refinanced and (y) does not permit
redemption or other retirement (including pursuant to an offer to purchase
made by the Company) of such Debt at the option of the holder thereof prior
to the time the same are required by the terms of the Debt being
refinanced, other than a redemption or other retirement at the option of
the holder of such Debt (including pursuant to an offer to purchase made by
the Company) which is conditioned upon a change of control pursuant to
provisions substantially similar to those described under "--Change of
Control";

(vi) Debt consisting of Permitted Interest Rate and Currency Protection
Agreements;

(vii) Debt secured by Receivables originated by the Company or any
Restricted Subsidiary and related assets, provided that such Debt is
nonrecourse to the Company and any of its other Restricted Subsidiaries and
provided further that Receivables shall not be available at any time to
secure Debt of the Company under this clause (vii) to the extent that they
are used at such time as the basis for the Incurrence of Debt in excess of
$100 million pursuant to clause (ii)(B)(y) of this paragraph (b); and

(viii) Debt not otherwise permitted to be Incurred pursuant to clauses
(i) through (vii) above, which, together with any other outstanding Debt
Incurred pursuant to this clause (viii), has an aggregate principal amount
not in excess of $25 million at any time outstanding.

Limitation on Debt and Preferred Stock of Restricted Subsidiaries. The
Company may not permit any Restricted Subsidiary that is not a Guarantor to
Incur any Debt or issue any Preferred Stock except any and all of the
following (each of which shall be given independent effect):

(i) Restricted Subsidiary Guarantees;

(ii) Debt of Restricted Subsidiaries under Credit Facilities permitted to
be Incurred pursuant to clause (ii) of paragraph (b) of "--Limitation on
Consolidated Debt";

(iii) Purchase Money Debt of Restricted Subsidiaries permitted to be
Incurred pursuant to clause (iii) of paragraph (b) of "--Limitation on
Consolidated Debt";

(iv) Debt owed by a Restricted Subsidiary of the Company to the Company
or a Restricted Subsidiary of the Company permitted to be Incurred pursuant
to clause (iv) of paragraph (b) of "--Limitation on Consolidated Debt";

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(v) Debt of Restricted Subsidiaries consisting of Permitted Interest Rate
and Currency Protection Agreements permitted to be Incurred pursuant to
clause (vi) of paragraph (b) of "--Limitation on Consolidated Debt";

(vi) Debt of Restricted Subsidiaries secured by Receivables originated by
the Company or any Restricted Subsidiary and related assets permitted to be
Incurred pursuant to clause (vii) of paragraph (b) of "--Limitation on
Consolidated Debt";

(vii) Debt of Restricted Subsidiaries permitted to be Incurred pursuant
to clause (viii) of paragraph (b) of "--Limitation on Consolidated Debt";

(viii) Preferred Stock issued to and held by the Company or a Restricted
Subsidiary;

(ix) Debt Incurred or Preferred Stock issued by a Person prior to the
time (A) such Person became a Restricted Subsidiary, (B) such Person merges
into or consolidates with a Restricted Subsidiary or (C) another Restricted
Subsidiary merges into or consolidates with such Person (in a transaction
in which such Person becomes a Restricted Subsidiary), which Debt or
Preferred Stock was not Incurred or issued in anticipation of such
transaction and was outstanding prior to such transaction; and

(x) Debt or Preferred Stock which is exchanged for, or the proceeds of
which are used to renew, extend, refinance, defease, refund or redeem any
Debt of a Restricted Subsidiary permitted to be Incurred pursuant to clause
(iii) of this paragraph or any Debt or Preferred Stock of a Restricted
Subsidiary permitted to be Incurred pursuant to clause (ix) hereof (or any
extension or renewal thereof) (for purposes hereof, a "refinancing"), in an
aggregate principal amount, in the case of Debt, or with an aggregate
liquidation preference, in the case of Preferred Stock, not to exceed the
aggregate principal amount of the Debt so refinanced or the aggregate
liquidation preference of the Preferred Stock so refinanced, plus the
amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Debt or Preferred Stock so
refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a tender
offer or privately negotiated repurchase, plus the amount of expenses of
the Company and the applicable Restricted Subsidiary Incurred in connection
therewith and provided the Debt or Preferred Stock Incurred or issued upon
such refinancing, by its terms, or by the terms of any agreement or
instrument pursuant to which such Debt or Preferred Stock is Incurred or
issued, (x) does not provide for payments of principal or liquidation value
at the stated maturity of such Debt or Preferred Stock or by way of a
sinking fund applicable to such Debt or Preferred Stock or by way of any
mandatory redemption, defeasance, retirement or repurchase of such Debt or
Preferred Stock by the Company or any Restricted Subsidiary (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in each
case prior to the time the same are required by the terms of the Debt or
Preferred Stock being refinanced and (y) does not permit redemption or
other retirement (including pursuant to an offer to purchase made by the
Company or a Restricted Subsidiary) of such Debt or Preferred Stock at the
option of the holder thereof prior to the stated maturity of the Debt or
Preferred Stock being refinanced, other than a redemption or other
retirement at the option of the holder of such Debt or Preferred Stock
(including pursuant to an offer to purchase made by the Company or a
Restricted Subsidiary) which is conditioned upon the change of control of
the Company pursuant to provisions substantially similar to those contained
in the Indenture described under "--Change of Control," and provided
further that in the case of any exchange or redemption of Preferred Stock
of a Restricted Subsidiary, such Preferred Stock may only be exchanged for
or redeemed with Preferred Stock of such Restricted Subsidiary.

Limitation on Restricted Payments. The Company (i) may not, and may not
permit any Restricted Subsidiary to, directly or indirectly, declare or pay
any dividend, or make any distribution, in respect of its Capital Stock or to
the holders thereof, excluding any dividends or distributions which are made

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solely to the Company or a Restricted Subsidiary (and, if such Restricted
Subsidiary is not a Wholly Owned Subsidiary, to the other stockholders of such
Restricted Subsidiary on a pro rata basis) or any dividends or distributions
payable solely in shares of its Capital Stock (other than Disqualified Stock)
or in options, warrants or other rights to acquire its Capital Stock (other
than Disqualified Stock); (ii) may not, and may not permit any Restricted
Subsidiary to, purchase, redeem, or otherwise retire or acquire for value (x)
any Capital Stock of the Company, any Restricted Subsidiary or any Related
Person of the Company (other than a permitted refinancing) or (y) any options,
warrants or rights to purchase or acquire shares of Capital Stock of the
Company, any Restricted Subsidiary or any Related Person of the Company or any
securities convertible or exchangeable into shares of Capital Stock of the
Company, any Restricted Subsidiary or any Related Person of the Company (other
than a permitted refinancing), except, in any such case, any such purchase,
redemption or retirement or acquisition for value paid to the Company or a
Restricted Subsidiary (or, in the case of any such purchase, redemption or
other retirement or acquisition for value with respect to a Restricted
Subsidiary that is not a Wholly Owned Subsidiary, paid to the Company or a
Restricted Subsidiary, or to the other stockholders of such Restricted
Subsidiary that is not a Wholly Owned Subsidiary, on a pro rata basis); (iii)
may not make, or permit any Restricted Subsidiary to make, any Investment in,
or payment on a Guarantee of any obligation of, any Person, other than the
Company or a Restricted Subsidiary; and (iv) may not, and may not permit any
Restricted Subsidiary to, redeem, defease, repurchase, retire or otherwise
acquire or retire for value, prior to any scheduled maturity, repayment or
sinking fund payment, Debt of the Company which is subordinate in right of
payment to the Notes (other than a permitted refinancing) (each of clauses (i)
through (iv) being a "Restricted Payment") if: (1) an Event of Default, or an
event that with the passing of time or the giving of notice, or both, would
constitute an Event of Default, shall have occurred and be continuing, or (2)
upon giving effect to such Restricted Payment, the Company could not Incur at
least $1.00 of additional Debt pursuant to the terms of the Indenture
described in paragraph (a) of "--Limitation on Consolidated Debt" above, or
(3) upon giving effect to such Restricted Payment, the aggregate of all
Restricted Payments from March 31, 1997 exceeds the sum of: (a) 50% of
cumulative Consolidated Net Income (or, in the case that Consolidated Net
Income shall be negative, 100% of such negative amount) since the end of the
last full fiscal quarter prior to March 31, 1997 through the last day of the
last full fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment, (b) plus $5 million, (c) less, in the case of any
Designation with respect to a Restricted Subsidiary that was made after March
31, 1997, an amount equal to the Designation Amount with respect to such
Restricted Subsidiary, (d) plus, in the case of any Revocation made after
March 31, 1997, an amount equal to the lesser of the Designation Amount with
respect to the Subsidiary with respect to which such Designation was made or
the Fair Market Value of the Investment of the Company and its Restricted
Subsidiaries in such Subsidiary at the time of Revocation; provided, however,
that the Company or a Restricted Subsidiary of the Company may make any
Restricted Payment with the aggregate net cash proceeds received after March
31, 1997 as capital contributions to the Company or from the issuance (other
than to a Subsidiary) of Capital Stock (other than Disqualified Stock) of the
Company and warrants, rights or options on Capital Stock (other than
Disqualified Stock) of the Company and the principal amount of Debt of the
Company that has been converted into Capital Stock (other than Disqualified
Stock and other than by a Subsidiary) of the Company after March 31, 1997.

Notwithstanding the foregoing limitation, (i) the Company and any Restricted
Subsidiary may make Permitted Investments; (ii) the Company may pay any
dividend on Capital Stock of any class of the Company within 60 days after the
declaration thereof if, on the date when the dividend was declared, the
Company could have paid such dividend in accordance with the foregoing
provisions; (iii) the Company may repurchase any shares of its Common Stock or
options to acquire its Common Stock from Persons who were formerly directors,
officers or employees of the Company or any of its Subsidiaries or Affiliates,
provided that the aggregate amount of all such repurchases made pursuant to
this clause (iii) shall not exceed $1 million in any twelve-month period; (iv)
the Company and any Restricted Subsidiary may refinance any Debt otherwise
permitted by clause (v) of paragraph (b) under

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"--Limitation on Consolidated Debt" above or clause (x) under "--Limitation on
Debt and Preferred Stock of Restricted Subsidiaries" above; and (v) the
Company and any Restricted Subsidiary may retire or repurchase any Capital
Stock of the Company or of any Restricted Subsidiary in exchange for, or out
of the proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Capital Stock (other than Disqualified Stock)
of the Company.

Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. (a) The Company may not, and may not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary (i) to pay dividends (in cash or
otherwise) or make any other distributions in respect of its Capital Stock
owned by the Company or any other Restricted Subsidiary or pay any Debt or
other obligation owed to the Company or any other Restricted Subsidiary; (ii)
to make loans or advances to the Company or any other Restricted Subsidiary;
or (iii) to transfer any of its property or assets to the Company or any other
Restricted Subsidiary.

(b) Notwithstanding the foregoing limitation, the Company may, and may
permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist any such encumbrance or restriction (i) pursuant to any agreement in
effect on March 31, 1997; (ii) any customary encumbrance or restriction
applicable to a Restricted Subsidiary that is contained in an agreement or
instrument governing or relating to Debt contained in any Credit Facilities or
Purchase Money Debt, provided that the provisions of such agreement permit the
payment of interest and mandatory payment or prepayment of principal pursuant
to the terms of the Indenture and the Notes and other Debt that is solely an
obligation of the Company, but provided further that such agreement may
nevertheless contain customary net worth, leverage, invested capital and other
financial covenants, customary covenants regarding the merger of or sale of
all or any substantial part of the assets of the Company or any Restricted
Subsidiary, customary restrictions on transactions with Affiliates, and
customary subordination provisions governing Debt owed to the Company or any
Restricted Subsidiary; (iii) pursuant to an agreement relating to any Acquired
Debt, which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person so acquired; (iv)
pursuant to an agreement effecting a renewal, refunding, permitted refinancing
or extension of Debt Incurred pursuant to an agreement referred to in clause
(i), (ii) or (iii) of this paragraph (b), provided, however, that the
provisions contained in such renewal, refunding or extension agreement
relating to such encumbrance or restriction are no more restrictive in any
material respect than the provisions contained in the agreement the subject
thereof; (v) in the case of clause (iii) of paragraph (a) above, restrictions
contained in any security agreement (including a Capital Lease Obligation)
securing Debt of the Company or a Restricted Subsidiary otherwise permitted
under the Indenture, but only to the extent such restrictions restrict the
transfer of the property subject to such security agreement; (vi) in the case
of clause (iii) of paragraph (a) above, customary nonassignment provisions
entered into in the ordinary course of business in leases and other agreements
and customary restrictions contained in asset sale agreements limiting the
transfer of such property or assets pending the closing of such sale; (vii)
any restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Restricted
Subsidiary, provided that the consummation of such transaction would not
result in a Default or an Event of Default, that such restriction terminates
if such transaction is not consummated and that the consummation or
abandonment of such transaction occurs within one year of the date such
agreement was entered into; (viii) pursuant to applicable law; and (ix)
pursuant to the Indenture and the Notes.

Limitation on Liens. The Company may not, and may not permit any Restricted
Subsidiary to, Incur or suffer to exist any Lien on or with respect to any
property or assets now owned or acquired after March 31, 1997 to secure any
Debt without making, or causing such Restricted

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Subsidiary to make, effective provision for securing the Notes (x) equally and
ratably with such Debt as to such property for so long as such Debt will be so
secured or (y) in the event such Debt is Debt of the Company which is
subordinate in right of payment to the Notes, prior to such Debt as to such
property for so long as such Debt will be so secured.

The foregoing restrictions shall not apply to: (i) Liens existing on March
31, 1997 and securing Debt outstanding on March 31, 1997; (ii) Liens in favor
of the Company or any Restricted Subsidiary; (iii) Liens to secure the Notes;
(iv) Liens to secure Restricted Subsidiary Guarantees; (v) Liens to secure
Debt under Credit Facilities permitted to be Incurred pursuant to clause (ii)
of paragraph (b) of "--Limitation on Consolidated Debt"; (vi) Liens on real or
personal property of the Company or a Restricted Subsidiary constructed,
installed, acquired or constituting improvements made after the date of
original issuance of the Notes to secure Purchase Money Debt permitted to be
Incurred pursuant to clause (iii) of paragraph (b) of "--Limitation on
Consolidated Debt"; provided, however, that (a) the principal amount of any
Debt secured by such a Lien does not exceed 100% of such purchase price or
cost of construction, installation or improvement of the property subject to
such Lien, (b) such Lien attaches to such property prior to, at the time of or
within 270 days after the acquisition, the completion of construction,
installation or improvement or the commencement of operation of such property
and (c) such Lien does not extend to or cover any property other than the
specific item of property (or portion thereof) acquired, constructed,
installed or constituting the improvements financed by the proceeds of such
Purchase Money Debt; (vii) Liens to secure Acquired Debt, provided, however,
that (a) such Lien attaches to the acquired asset prior to the time of the
acquisition of such asset and (b) such Lien does not extend to or cover any
other asset; (viii) Liens to secure Debt Incurred to extend, renew, refinance
or refund (or successive extensions, renewals, refinancings or refundings), in
whole or in part, Debt secured by any Lien referred to in the foregoing
clauses (i), (iii), (iv), (v), (vi) and (vii) so long as such Lien does not
extend to any other property and the principal amount of Debt so secured is
not increased except as otherwise permitted under clause (v) of paragraph (b)
under "--Limitation on Consolidated Debt" above or clause (x) under "--
Limitation on Debt and Preferred Stock of Restricted Subsidiaries" above; (ix)
Liens to secure debt consisting of Permitted Interest Rate and Currency
Protection Agreements permitted to be Incurred pursuant to clause (vi) of
paragraph (b) under "--Limitation on Consolidated Debt"; (x) Liens to secure
Debt secured by Receivables permitted to be Incurred pursuant to clause (vii)
of paragraph (b) under "--Limitation on Consolidated Debt"; (xi) Liens to
secure Debt of Restricted Subsidiaries permitted to be Incurred pursuant to
clause (viii) of paragraph (b) under "--Limitation on Consolidated Debt";
(xii) Liens not otherwise permitted by the foregoing clauses (i) through (xi)
in an amount not to exceed 5% of the Company's Consolidated Tangible Assets;
and (xiii) Permitted Liens.

Limitation on Issuances of Certain Guarantees by, and Debt Securities of,
Restricted Subsidiaries. The Company may not (i) permit any Restricted
Subsidiary to, directly or indirectly, guarantee any Debt Securities of the
Company or (ii) permit any Restricted Subsidiary to issue any Debt Securities
unless, in either such case, such Restricted Subsidiary simultaneously
executes and delivers Restricted Subsidiary Guarantees providing for a
Guarantee of payment of the Notes.

Limitation on Sale and Leaseback Transactions. The Company may not, and may
not permit any Restricted Subsidiary to, directly or indirectly, enter into,
assume, Guarantee or otherwise become liable with respect to any Sale and
Leaseback Transaction, other than a Sale and Leaseback Transaction between the
Company or a Restricted Subsidiary on the one hand and a Restricted Subsidiary
or the Company on the other hand, unless (i) the Company or such Restricted
Subsidiary would be entitled to Incur a Lien to secure Debt by reason of the
provisions described under "--Limitation on Liens" above, equal in amount to
the Attributable Value of the Sale and Leaseback Transaction without equally
and ratably securing the Notes and (ii) the Sale and Leaseback Transaction is
treated as an Asset Disposition and all of the conditions of the Indenture
described under "--Limitation on Asset Dispositions" below (including the
provisions concerning the application

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of Net Available Proceeds) are satisfied with respect to such Sale and
Leaseback Transaction, treating all of the consideration received in such Sale
and Leaseback Transaction as Net Available Proceeds for purposes of such
covenant.

Limitation on Asset Dispositions. The Company may not, and may not permit
any Restricted Subsidiary to, make any Asset Disposition unless: (i) the
Company or the Restricted Subsidiary, as the case may be, receives
consideration for such disposition at least equal to the Fair Market Value for
the assets sold or disposed of as determined by the board of directors of the
Company in good faith and evidenced by a resolution of the board of directors
of the Company filed with the Trustee; and (ii) at least 75% of the
consideration for such disposition consists of cash or Cash Equivalents or the
assumption of Debt of the Company (other than Debt that is subordinated to the
Notes) or of the Restricted Subsidiary and release from all liability on the
Debt assumed. If the aggregate amount of Net Available Proceeds within any 12-
month period exceeds $5 million, then all such Net Available Proceeds shall be
applied within 360 days of the last such Asset Disposition (1) first, to the
permanent repayment or reduction of Debt then outstanding under any Credit
Facility, to the extent such agreements would require such application or
prohibit payments pursuant to clause (2) following; (2) second, to the extent
of remaining Net Available Proceeds, to make an Offer to Purchase outstanding
Notes at a price in cash equal to 100% of the principal amount of the Notes
plus accrued and unpaid interest thereon and premium, if any, to the purchase
date and, to the extent required by the terms thereof, any other Debt of the
Company that is pari passu with the Notes at a price no greater than 100% of
the principal amount thereof plus accrued and unpaid interest to the purchase
date (or 100% of the accreted value plus accrued and unpaid interest and
premium, if any, to the purchase date in the case of original issue discount
Debt); (3) third, to the extent of any remaining Net Available Proceeds
following the completion of the Offer to Purchase, to the repayment of other
Debt of the Company or Debt of a Restricted Subsidiary, to the extent
permitted under the terms thereof; and (4) fourth, to the extent of any
remaining Net Available Proceeds, to any other use as determined by the
Company which is not otherwise prohibited by the Indenture. Limitation on
Issuances and Sales of Capital Stock of Restricted Subsidiaries. The Company
may not, and may not permit any Restricted Subsidiary to, issue, transfer,
convey, sell or otherwise dispose of any shares of Capital Stock of a
Restricted Subsidiary or securities convertible or exchangeable into, or
options, warrants, rights or any other interest with respect to, Capital Stock
of a Restricted Subsidiary to any Person other than the Company or a
Restricted Subsidiary except (i) a sale of all of the Capital Stock of such
Restricted Subsidiary owned by the Company and any Restricted Subsidiary that
complies with the provisions described under "--Limitation on Asset
Dispositions" above to the extent such provisions apply, (ii) in a transaction
that results in such Restricted Subsidiary becoming a Permitted Joint Venture,
provided (x) such transaction complies with the provisions described under "--
Limitation on Asset Dispositions" above to the extent such provisions apply
and (y) the Company's remaining Investment in such Permitted Joint Venture
would have been permitted as a new Investment under the provisions of "--
Limitation on Restricted Payments" above, (iii) the transfer, conveyance, sale
or other disposition of shares required by applicable law or regulation, (iv)
if required, the issuance, transfer, conveyance, sale or other disposition of
directors' qualifying shares, or (v) Disqualified Stock issued in exchange
for, or upon conversion of, or the proceeds of the issuance of which are used
to redeem, refinance, replace or refund shares of Disqualified Stock of such
Restricted Subsidiary, provided that the amounts of the redemption obligations
of such Disqualified Stock shall not exceed the amounts of the redemption
obligations of, and such Disqualified Stock shall have redemption obligations
no earlier than those required by, the Disqualified Stock being exchanged,
converted, redeemed, refinanced, replaced or refunded.

Transactions with Affiliates and Related Persons. The Company may not, and
may not permit any Restricted Subsidiary to, enter into any transaction (or
series of related transactions) with an Affiliate or Related Person of the
Company (other than the Company or a Restricted Subsidiary), including any
Investment, unless such transaction is on terms no less favorable to the
Company or

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such Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate or Related
Person and is in the best interests of the Company or such Restricted
Subsidiary, provided that the Company or any Restricted Subsidiary may enter
into (i) transactions pursuant to the Company's existing tax sharing agreement
entered into with Anschutz Company described under the caption "Certain
Transactions" in this Prospectus, provided that any amendment of, supplement
to or substitute for such agreement is on terms that are no less favorable to
the Company or such Restricted Subsidiary than such existing agreement, (ii)
transactions pursuant to employee compensation arrangements approved by the
board of directors of the Company, either directly or indirectly, and (iii)
Receivables Sales between the Company or a Restricted Subsidiary and an
Affiliate of the Company or such Restricted Subsidiary, provided that such
Receivables Sales satisfy the provisions of clauses (i) and (ii) of "--
Limitation on Asset Dispositions." For any transaction that involves in excess
of $10 million but less than or equal to $15 million, the Company shall
deliver to the Trustee an Officers' Certificate stating that the transaction
satisfies the above criteria. For any transaction that involves in excess of
$15 million, a majority of the disinterested members of the board of directors
of the Company shall determine that the transaction satisfies the above
criteria and shall evidence such a determination by a board resolution filed
with the Trustee or, in the event that there shall not be disinterested
members of the board of directors with respect to the transaction, the Company
shall file with the Trustee a written opinion stating that the transaction
satisfies the above criteria from an investment banking firm of national
standing in the United States which, in the good faith judgment of the board
of directors of the Company, is independent with respect to the Company and
its Affiliates and qualified to perform such task.

Change of Control. Within 30 days of the occurrence of a Change of Control,
the Company will be required to make an Offer to Purchase all outstanding
Notes at a price in cash equal to 101% of the principal amount of the Notes
plus accrued and unpaid interest thereon and premium, if any, to the purchase
date. A "Change of Control" will be deemed to have occurred at such time as
(x) a Rating Decline shall have occurred and (y) either (A) the sale,
conveyance, transfer or lease of all or substantially all of the assets of the
Company to any Person or any Persons acting together that would constitute a
"group" (a "Group") for purposes of Section 13(d) of the Exchange Act,
together with any Affiliates or Related Persons thereof, other than any
Permitted Holder or any Restricted Subsidiary, shall have occurred; (B) any
Person or Group, together with any Affiliates or Related Persons thereof,
other than any Permitted Holder or any Restricted Subsidiary, shall
beneficially own (within the meaning of Rule 13d-3 under the Exchange Act,
except that a Person will be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) at least 50% of the aggregate
voting power of all classes of Voting Stock of the Company at a time when
Permitted Holders own less than or equal to 25% of the aggregate voting power
of all classes of Voting Stock of the Company; or (C) during any period of two
consecutive years, Continuing Directors cease for any reason to constitute a
majority of the Company's board of directors then in office.

In the event that the Company makes an Offer to Purchase the Notes, the
Company intends to comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.

The existence of the holders' right to require, subject to certain
conditions, the Company to repurchase Notes upon a Change of Control may deter
a third party from acquiring the Company in a transaction that constitutes a
Change of Control. If an Offer to Purchase is made, there can be no assurance
that the Company will have sufficient funds to pay the Purchase Price for all
Notes tendered by holders seeking to accept the Offer to Purchase. In
addition, instruments governing other Debt of the Company may prohibit the
Company from purchasing any Notes prior to their Stated Maturity, including
pursuant to an Offer to Purchase. See "Description of Certain Indebtedness."
In the event that an Offer to Purchase occurs at a time when the Company does
not have sufficient available funds

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to pay the Purchase Price for all Notes tendered pursuant to such Offer to
Purchase or a time when the Company is prohibited from purchasing the Notes
(and the Company is unable either to obtain the consent of the holders of the
relevant Debt or to repay such Debt), an Event of Default would occur under
the Indenture. In addition, one of the events that constitutes a Change of
Control under the Indenture is a sale, conveyance, transfer or lease of all or
substantially all of the property of the Company. The Indenture will be
governed by New York law, and there is no established definition under New
York law of "substantially all" of the assets of a corporation. Accordingly,
if the Company were to engage in a transaction in which it disposed of less
than all of its assets, a question of interpretation could arise as to whether
such disposition was of "substantially all" of its assets and whether the
Company was required to make an Offer to Purchase.

Except as described herein with respect to a Change of Control, the
Indenture does not contain any other provisions that permit holders of Notes
to require that the Company repurchase or redeem Notes in the event of a
takeover, recapitalization or similar restructuring.

SEC Reports. The Company shall provide the Trustee, the Initial Purchasers
of the Notes, the holders of the Notes and (upon request) prospective holders
of the Notes with annual and quarterly reports and such other information as
is specified under Sections 13 and 15(d) of the Exchange Act ("SEC Reports")
on the date on which the Company is required to file the same with the
Commission. In the event the Company shall cease to be required to file SEC
Reports pursuant to the Exchange Act, the Company will nevertheless continue
to file such reports with the Commission (unless the Commission will not
accept such a filing) and the Trustee. The Company will furnish copies of the
SEC Reports to the holders of Notes at the time the Company is required to
file the same with the Trustee and will make such information available to
investors who request it in writing.

Limitation on Designations of Unrestricted Subsidiaries. The Indenture will
provide that the Company will not designate any Subsidiary of the Company
(other than a newly created Subsidiary in which no Investment has previously
been made) as an "Unrestricted Subsidiary" under the Indenture (a
"Designation") unless:

(a) no Default or Event of Default shall have occurred and be continuing at
the time of or after giving effect to such Designation;

(b) immediately after giving effect to such Designation, the Company would
be able to Incur $1.00 of Debt under paragraph (a) of "--Limitation on
Consolidated Debt"; and

(c) the Company would not be prohibited under the Indenture from making an
Investment at the time of Designation (assuming the effectiveness of such
Designation) in an amount (the "Designation Amount") equal to the Fair Market
Value of the net Investment of the Company or any other Restricted Subsidiary
in such Restricted Subsidiary on such date.

In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to the covenant
"--Limitation on Restricted Payments" for all purposes of the Indenture in the
Designation Amount. The Indenture will further provide that neither the
Company nor any Restricted Subsidiary shall at any time (x) provide credit
support for, or a guarantee of, any Debt of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such Debt);
provided that the Company or a Restricted Subsidiary may pledge Capital Stock
or Debt of any Unrestricted Subsidiary on a nonrecourse basis such that the
pledgee has no claim whatsoever against the Company other than to obtain such
pledged property, (y) be directly or indirectly liable for any Debt of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any Debt
which provides that the holder thereof may (upon notice, lapse of time or
both) declare a default thereon or cause the payment thereof to be accelerated
or payable prior to its final scheduled maturity upon the occurrence of a
default with respect to any Debt of any Unrestricted Subsidiary (including any
right to take enforcement action against such Unrestricted Subsidiary), except
in the case of clause (x) or (y) to the extent permitted under "--Limitation
on Restricted Payments" and "--Transactions with Affiliates and Related
Persons."

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The Indenture will further provide that a Designation may be revoked (a
"Revocation") by a resolution of the board of directors of the Company
delivered to the Trustee, provided that the Company will not make any
Revocation unless:

(a) no Default or Event of Default shall have occurred and be continuing at
the time of and after giving effect to such Revocation; and

(b) all Liens and Debt of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time, have
been permitted to be Incurred at such time for all purposes of the Indenture.

All Designations and Revocations must be evidenced by resolutions of the
board of directors of the Company delivered to the Trustee certifying
compliance with the foregoing provisions.

MERGERS, CONSOLIDATIONS AND CERTAIN SALES OF ASSETS

The Company may not, in a single transaction or a series of related
transactions, (i) consolidate with or merge into any other Person or Persons
or permit any other Person to consolidate with or merge into the Company
(other than a merger of Qwest Corporation into the Company in which the
Company shall be the surviving Person) or (ii) directly or indirectly,
transfer, sell, lease or otherwise dispose of all or substantially all of its
assets to any other Person or Persons unless: (a) in a transaction in which
the Company is not the surviving Person or in which the Company sells, leases
or otherwise disposes of all or substantially all of its assets to any other
Person, the resulting surviving or transferee Person (the "successor entity")
is organized under the laws of the United States of America or any State
thereof or the District of Columbia and shall expressly assume, by
supplemental indentures executed and delivered to the Trustee in form
satisfactory to the Trustee, all of the Company's respective obligations under
the Indenture; (b) immediately before and after giving effect to such
transaction and treating any Debt which becomes an obligation of the Company
or a Restricted Subsidiary as a result of such transaction as having been
Incurred by the Company or such Restricted Subsidiary at the time of the
transaction, no Default or Event of Default shall have occurred and be
continuing; (c) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company (or other successor entity to the
Company) is equal to or greater than that of the Company immediately prior to
the transaction; (d) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company or a Restricted
Subsidiary as a result of such transaction as having been Incurred by the
Company or such Restricted Subsidiary at the time of the transaction, the
Company (including any successor entity to the Company) could Incur at least
$1.00 of additional Debt pursuant to the provisions of the Indenture described
in paragraph (a) under "--Certain Covenants--Limitation on Consolidated Debt"
above; (e) if, as a result of any such transaction, property or assets of the
Company would become subject to a Lien prohibited by the provisions of the
Indenture described under "--Certain Covenants--Limitation on Liens" above,
the Company or the successor entity to the Company shall have secured the
Notes as required by said covenant; and (f) certain other conditions are met.

CERTAIN DEFINITIONS

Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.

"Acquired Debt" means, with respect to any specified Person, (i) Debt of any
other Person existing at the time such Person merges with or into or
consolidates with or becomes a Subsidiary of such specified Person and (ii)
Debt secured by a Lien encumbering any asset acquired by such specified
Person, which Debt was not incurred in anticipation of, and was outstanding
prior to, such merger, consolidation or acquisition.

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"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

"Asset Disposition" means any transfer, conveyance, sale, lease or other
disposition by the Company or any Restricted Subsidiary in one or more related
transactions occurring within any 12-month period (including a consolidation
or merger or other sale of any such Restricted Subsidiary with, into or to
another Person in a transaction in which such Restricted Subsidiary ceases to
be a Restricted Subsidiary of the Company, but excluding a disposition by a
Restricted Subsidiary to the Company or a Restricted Subsidiary or by the
Company to a Restricted Subsidiary) of (i) shares of Capital Stock or other
ownership interests of a Restricted Subsidiary (other than as permitted by the
provisions of the Indenture described in clauses (iii), (iv) and (v) of
section 1019 of the Indenture), (ii) substantially all of the assets of the
Company or any Restricted Subsidiary representing a division or line of
business or (iii) other assets or rights of the Company or any Restricted
Subsidiary outside of the ordinary course of business (excluding any transfer,
conveyance, sale, lease or other disposition of equipment that is obsolete or
no longer used by or useful to the Company, provided that the Company has
delivered to the Trustee an Officers' Certificate stating that such criteria
are satisfied); provided in each case that the aggregate consideration for
such transfer, conveyance, sale, lease or other disposition is equal to
$500,000 or more in any 12-month period and provided further that the
following shall not be Asset Dispositions: (x) Permitted Telecommunications
Capital Asset Dispositions, (y) exchanges of Telecommunications Assets for
other Telecommunications Assets where the Fair Market Value of the
Telecommunications Assets received is at least equal to the Fair Market Value
of the Telecommunications Assets disposed of or, if less, the difference is
received in cash and such cash is Net Available Proceeds and (z) Liens
permitted to be Incurred pursuant to the second paragraph under "--Limitation
on Liens."

"Attributable Value" means, as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation, and at any
date as of which the amount thereof is to be determined, the total net amount
of rent required to be paid by such Person under such lease during the initial
term thereof as determined in accordance with generally accepted accounting
principles, discounted from the last date of such initial term to the date of
determination at a rate per annum equal to the discount rate which would be
applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to
be paid under any such lease for any such period shall be the aggregate amount
of rent payable by the lessee with respect to such period after excluding
amounts required to be paid on account of insurance, taxes, assessments,
utility, operating and labor costs and similar charges. In the case of any
lease which is terminable by the lessee upon the payment of penalty, such net
amount shall also include the lesser of the amount of such penalty (in which
case no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) or the rent
which would otherwise be required to be paid if such lease is not so
terminated. "Attributable Value" means, as to a Capital Lease Obligation, the
principal amount thereof.

"Capital Lease Obligation" of any Person means the obligation to pay rent or
other payment amounts under a lease of (or other Debt arrangements conveying
the right to use) real or personal property of such Person which is required
to be classified and accounted for as a capital lease or a liability on the
face of a balance sheet of such Person in accordance with generally accepted
accounting principles (a "Capital Lease"). The stated maturity of such
obligation shall be the date of the last payment of rent or any other amount
due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty. The principal amount of
such obligation shall be the capitalized amount thereof that would appear on
the face of a balance sheet of such Person in accordance with generally
accepted accounting principles.

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"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general
or limited, of such Person.

"Cash Equivalents" means (i) any Debt with a maturity of 365 days or less
issued or directly and fully guaranteed as insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof or such Debt constitutes a
general obligation of such country); (ii) deposits, certificates of deposit or
acceptances with a maturity of 365 days or less of any financial institution
that is a member of the Federal Reserve System, in each case having combined
capital and surplus and undivided profits (or any similar capital concept) of
not less than $500 million and whose senior unsecured debt is rated at least
"A-1" by Standard & Poor's Corporation or "P-1" by Moody's Investors Service,
Inc.; (iii) commercial paper with a maturity of 365 days or less issued by a
corporation (other than an Affiliate of the Company) organized under the laws
of the United States or any State thereof and rated at least "A-1" by Standard
& Poor's Corporation or "P-1" by Moody's Investors Service, Inc.; and (iv)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States
or issued by any agency or instrumentality thereof and backed by the full
faith and credit of the United States maturing within 365 days from the date
of acquisition.

"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding
up of such Person, to shares of Capital Stock of any other class of such
Person.

"Consolidated Capital Ratio" of any Person as of any date means the ratio of
(i) the aggregate consolidated principal amount of Debt of such Person then
outstanding to (ii) the greater of either (a) the aggregate consolidated paid-
in capital of such Person as of such date or (b) the stockholders' equity as
of such date as shown on the consolidated balance sheet of such Person in
accordance with generally accepted accounting principles.

"Consolidated Cash Flow Available for Fixed Charges" for any period means
the Consolidated Net Income of the Company and its Restricted Subsidiaries for
such period increased by the sum of (i) Consolidated Interest Expense of the
Company and its Restricted Subsidiaries for such period, plus (ii)
Consolidated Income Tax Expense of the Company and its Subsidiaries for such
period, plus (iii) the consolidated depreciation and amortization expense or
other non-cash write-offs of assets included in the income statement of the
Company and its Restricted Subsidiaries for such period, plus (iv) any charge
related to any premium or penalty paid in connection with redeeming or
retiring any Debt prior to its stated maturity; provided, however, that there
shall be excluded therefrom the Consolidated Cash Flow Available for Fixed
Charges (if positive) of any Restricted Subsidiary (calculated separately for
such Restricted Subsidiary in the same manner as provided above for the
Company) that is subject to a restriction which prevents the payment of
dividends or the making of distributions to the Company or another Restricted
Subsidiary to the extent of such restriction.

"Consolidated Income Tax Expense" for any period means the aggregate amounts
of the provisions for income taxes of the Company and its Subsidiaries for
such period calculated on a consolidated basis in accordance with generally
accepted accounting principles.

"Consolidated Interest Expense" means for any period the interest expense
included in a consolidated income statement (excluding interest income) of the
Company and its Restricted Subsidiaries for such period in accordance with
generally accepted accounting principles, including without limitation or
duplication (or, to the extent not so included, with the addition of), (i) the
amortization of Debt discounts; (ii) any payments or fees with respect to
letters of credit, bankers'

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acceptances or similar facilities; (iii) fees with respect to interest rate
swap or similar agreements or foreign currency hedge, exchange or similar
agreements; (iv) Preferred Stock dividends of the Company and its Subsidiaries
(other than dividends paid in shares of Preferred Stock that is not
Disqualified Stock) declared and paid or payable; (v) accrued Disqualified
Stock dividends of the Company and its Restricted Subsidiaries, whether or not
declared or paid; (vi) interest on Debt guaranteed by the Company and its
Restricted Subsidiaries; and (vii) the portion of any Capital Lease Obligation
paid during such period that is allocable to interest expense.

"Consolidated Net Income" for any period means the net income (or loss) of
the Company and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting
principles; provided that there shall be excluded therefrom (a) the net income
(or loss) of any Person acquired by the Company or a Restricted Subsidiary in
a pooling-of-interests transaction for any period prior to the date of such
transaction, (b) the net income (or loss) of any Person that is not a
Restricted Subsidiary except to the extent of the amount of dividends or other
distributions actually paid to the Company or a Restricted Subsidiary by such
Person during such period, (c) gains or losses on Asset Dispositions by the
Company or its Restricted Subsidiaries, (d) all extraordinary gains and
extraordinary losses, determined in accordance with generally accepted
accounting principles, (e) the cumulative effect of changes in accounting
principles, (f) non-cash gains or losses resulting from fluctuations in
currency exchange rates, (g) any non-cash expense related to the issuance to
employees or directors of the Company or any Restricted Subsidiary or any
Affiliate of the Company of (i) options to purchase Capital Stock of the
Company or such Restricted Subsidiary or (ii) other compensatory rights
(including under the Company's Growth Share Plan), provided, in either case,
that such options or rights, by their terms, can be redeemed only for Capital
Stock, (h) with respect to a Restricted Subsidiary that is not a Wholly Owned
Subsidiary, any aggregate net income (or loss) in excess of the Company's or
any Restricted Subsidiary's pro rata share of the net income (or loss) of such
Restricted Subsidiary that is not a Wholly Owned Subsidiary shall be excluded
and (i) the tax effect of any of the items described in clauses (a) through
(h) above; provided further that for purposes of any determination pursuant to
the provisions described under "--Certain Covenants--Limitation on Restricted
Payments," there shall further be excluded therefrom the net income (but not
net loss) of any Restricted Subsidiary that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the
Company or another Restricted Subsidiary to the extent of such restriction.

"Consolidated Net Worth" of any Person means the stockholders' equity of
such Person, determined on a consolidated basis in accordance with generally
accepted accounting principles, less amounts attributable to Disqualified
Stock of such Person; provided that, with respect to the Company, adjustments
following March 31, 1997 to the accounting books and records of the Company in
accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person shall not be given effect to.

"Consolidated Tangible Assets" of any Person means the total amount of
assets (less applicable reserves and other properly deductible items) which
under generally accepted accounting principles would be included on a
consolidated balance sheet of such Person and its Subsidiaries after deducting
therefrom all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such
consolidated balance sheet.

"Continuing Director" means, as of any date of determination, any member of
the board of directors of the Company who (i) was a member of such board of
directors of the Company on March 31, 1997, or (ii) was nominated for election
or elected to the board of directors of the Company with the affirmative vote
of a majority of the Continuing Directors who were members of the board of
directors of the Company at the time of such nomination or election or the
affirmative vote of Permitted Holders.

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"Credit Facilities" means one or more credit agreements, loan agreements or
similar facilities, secured or unsecured, entered into from time to time by
the Company and its Restricted Subsidiaries, and including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified,
restated or replaced from time to time.

"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or
not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase
price of property or services (including securities repurchase agreements but
excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business), (v) every Capital Lease Obligation of such
Person, (vi) all Receivables Sales of such Person, together with any
obligation of such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith, (vii)
all obligations to redeem Disqualified Stock issued by such Person, (viii)
every obligation under Interest Rate and Currency Protection Agreements of
such Person and (ix) every obligation of the type referred to in clauses (i)
through (viii) of another Person and all dividends of another Person the
payment of which, in either case, such Person has Guaranteed. The "amount" or
"principal amount" of Debt at any time of determination as used herein
represented by (a) any Debt issued at a price that is less than the principal
amount at maturity thereof, shall be the amount of the liability in respect
thereof determined in accordance with generally accepted accounting
principles, (b) any Receivables Sale shall be the amount of the unrecovered
capital or principal investment of the purchaser (other than the Company or a
Wholly Owned Subsidiary of the Company) thereof, excluding amounts
representative of yield or interest earned on such investment or (c) any
Disqualified Stock shall be the maximum fixed redemption or repurchase price
in respect thereof.

"Debt Securities" means any debt securities (including any guarantee of such
securities) issued by the Company or any Restricted Subsidiary of the Company
in connection with a public offering or a private placement (excluding Debt
permitted to be Incurred under paragraph (b) of "--Certain Covenants--
Limitation on Consolidated Debt").

"Default" means any event, act or condition the occurrence of which is, or
after notice or the passage of time or both would be, an Event of Default.

"Depository" means The Depository Trust Company, its nominees and
successors.

"Disqualified Stock" of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of such Person, any
Subsidiary of such Person or the holder thereof, in whole or in part, on or
prior to the final Stated Maturity of the Notes, provided, however, that any
Preferred Stock which would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require the Company to
repurchase or redeem such Preferred Stock upon the occurrence of a Change of
Control occurring prior to the final Stated Maturity of the Notes shall not
constitute Disqualified Stock if the change of control provisions applicable
to such Preferred Stock are no more favorable to the holders of such Preferred
Stock than the provisions applicable to the Notes contained in the covenant
described under "--Certain Covenants--Change of Control" and such Preferred
Stock specifically provides that the Company will not repurchase or redeem any
such stock pursuant to such provisions prior to the Company's repurchase of
such Notes as are required to be repurchased pursuant to the covenant
described under "--Certain Covenants--Change of Control."

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"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent
in foreign currency, whose debt is rated "A" (or higher) according to Standard
& Poor's Corporation or Moody's Investors Service, Inc. at the time as of
which any investment or rollover therein is made.

"Eligible Receivables" means, at any time, Receivables of the Company and
its Restricted Subsidiaries, as evidenced on the most recent quarterly
consolidated balance sheet of the Company as at a date at least 45 days prior
to such time, less Receivables of the Company or any Restricted Subsidiary
employed to secure Debt Incurred under clause (vii) of paragraph (b) of "--
Certain Covenants--Limitation on Consolidated Debt."

"Event of Default" has the meaning set forth under "Events of Default"
below.

"Exchange Act" means the Securities Exchange Act of 1934, as amended (or any
successor act) and the rules and regulations thereunder (or respective
successors thereto).

"Fair Market Value" means, with respect to any asset or property, the price
that could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under
pressure or compulsion to complete the transaction. Unless otherwise specified
in the Indenture, Fair Market Value shall be determined by the board of
directors of the Company acting in good faith and shall be evidenced by a
resolution of the board of directors of the Company delivered to the Trustee.

"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged and
which have a remaining weighted average life to maturity of not less than one
year from the date of investment therein.

"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing, or having the economic effect of guaranteeing, any
Debt of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including, without limitation, any obligation of
such Person, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Debt, (ii) to
purchase property, securities or services for the purpose of assuring the
holder of such Debt of the payment of such Debt, or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Debt (and
"Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings correlative
to the foregoing); provided, however, that the Guarantee by any Person shall
not include endorsements by such Person for collection or deposit, in either
case, in the ordinary course of business.

"Guarantor" means a Restricted Subsidiary of the Company that has executed a
Restricted Subsidiary Guarantee.

"Incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other
obligation including by acquisition of Subsidiaries or the recording, as
required pursuant to generally accepted accounting principles or otherwise, of
any such Debt or other obligation on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided, however, that a change in generally
accepted accounting principles that results in an obligation of such Person
that exists at such time becoming Debt shall not be deemed an Incurrence of
such Debt and that neither the accrual of interest nor the accretion of
original issue discount shall be deemed an Incurrence of Debt.

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"Interest Rate or Currency Protection Agreement" of any Person means any
forward contract, futures contract, swap, option or other financial agreement
or arrangement (including, without limitation, caps, floors, collars and
similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.

"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) to, or purchase or acquisition of
Capital Stock, bonds, notes, debentures or other securities or evidence of
Debt issued by, any other Person, including any payment on a Guarantee of any
obligation of such other Person.

"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any
easement not materially impairing usefulness), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing). For
purposes of this definition the sale, lease, conveyance or other transfer by
the Company or any Subsidiary of, including the grant of indefeasible rights
of use or equivalent arrangements with respect to, dark or lit communications
fiber capacity or communications conduit shall not constitute a Lien.

"Net Available Proceeds" from any Asset Disposition by any Person means cash
or Cash Equivalents received (including amounts received by way of sale or
discounting of any note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Debt or other obligations relating to such properties or assets)
therefrom by such Person, net of (i) any portion thereof Invested within 360
days of such Asset Disposition in Telecommunications Assets, (ii) all legal,
title and recording tax expenses, commissions and other fees and expenses
Incurred and all federal, state, provincial, foreign and local taxes required
to be accrued as a liability as a consequence of such Asset Disposition, (iii)
all payments made by such Person or its Subsidiaries on any Debt which is
secured by such assets in accordance with the terms of any Lien upon or with
respect to such assets or which must by the terms of such Lien, or in order to
obtain a necessary consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (iv) all distributions
and other payments made to minority interest holders in Subsidiaries of such
Person or Permitted Joint Ventures as a result of such Asset Disposition and
(v) appropriate amounts to be provided by such Person or any Subsidiary
thereof, as the case may be, as a reserve in accordance with generally
accepted accounting principles against any liabilities associated with such
assets and retained by such Person or any Subsidiary thereof, as the case may
be, after such Asset Disposition, including, without limitation, liabilities
under any indemnification obligations and severance and other employee
termination costs associated with such Asset Disposition, in each case as
determined by the board of directors of such Person, in its reasonable good
faith judgment evidenced by a resolution of the board of directors filed with
the Trustee; provided, however, that any reduction in such reserve within
twelve months following the consummation of such Asset Disposition will be for
all purposes of the Indenture and the Notes as a new Asset Disposition at the
time of such reduction with Net Available Proceeds equal to the amount of such
reduction.

"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first class mail, postage prepaid, to each holder of Notes at its address
appearing in the Note Register on the date of the Offer offering to purchase
up to the principal amount of Notes specified in such Offer at the purchase
price specified in such Offer (as determined pursuant to the Indenture).
Unless otherwise required by applicable law, the Offer shall specify an
expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law, not less than 30

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days or more than 60 days after the date of such Offer and a settlement date
(the "Purchase Date") for purchase of Notes within five Business Days after
the Expiration Date. The Company shall notify the Trustee at least 15 Business
Days (or such shorter period as is acceptable to the Trustee) prior to the
mailing of the Offer of the Company's obligation to make an Offer to Purchase,
and the Offer shall be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company. The Offer shall
contain information concerning the business of the Company and its
Subsidiaries which the Company in good faith believes will enable such holders
to make an informed decision with respect to the Offer to Purchase (which at a
minimum will include (i) the most recent annual and quarterly financial
statements and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in the documents required to be filed
with the Trustee pursuant to the Indenture (which requirements may be
satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to
the date of the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the Offer
to Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to make
the Offer to Purchase and (iv) any other information required by applicable
law to be included therein). The Offer shall contain all instructions and
materials necessary to enable such holders to tender Notes pursuant to the
Offer to Purchase. The Offer shall also state:

a. the Section of the Indenture pursuant to which the Offer to Purchase
is being made;

b. the Expiration Date and the Purchase Date;

c. the aggregate principal amount of the outstanding Notes offered to be
purchased by the Company pursuant to the Offer to Purchase (including, if
less than 100%, the manner by which such has been determined pursuant to
the section hereof requiring the Offer to Purchase) (the "Purchase
Amount");

d. the purchase price to be paid by the Company for each $1,000 aggregate
principal amount of Notes accepted for payment (as specified pursuant to
the Indenture) (the "Purchase Price");

e. that the holder may tender all or any portion of the Notes registered
in the name of such holder and that any portion of a Note tendered must be
tendered in an integral multiple of $1,000 principal amount;

f. the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;

g. that any Notes not tendered or tendered but not purchased by the
Company will continue to accrue interest;

h. that on the Purchase Date the Purchase Price will become due and
payable upon each Note being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date;

i. that each holder electing to tender a Note pursuant to the Offer to
Purchase will be required to surrender such Note at the place or places
specified in the Offer prior to the close of business on the Expiration
Date (such Note being, if the Company or the Trustee so requires, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder
thereof or his attorney duly authorized in writing);

j. that holders will be entitled to withdraw all or any portion of Notes
tendered if the Company (or its paying agent) receives, not later than the
close of business on the Expiration Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the holder, the principal
amount of the Note the holder tendered, the certificate number of the Note
the holder tendered and a statement that such holder is withdrawing all or
a portion of his tender;

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k. that (a) if Notes in an aggregate principal amount less than or equal
to the Purchase Amount are duly tendered and not withdrawn pursuant to the
Offer to Purchase, the Company shall purchase all such Notes and (b) if
Notes in an aggregate principal amount in excess of the Purchase Amount are
tendered and not withdrawn pursuant to the Offer to Purchase, the Company
shall purchase Notes having an aggregate principal amount equal to the
Purchase Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Notes in denominations of $1,000 or integral
multiples thereof shall be purchased); and

l. that in the case of any holder whose Note is purchased only in part,
the Company shall execute, and the Trustee shall authenticate and deliver
to the holder of such Note without service charge, a new Note or Notes, of
any authorized denomination as requested by such holder, in an aggregate
principal amount equal to and in exchange for the unpurchased portion of
the Note so tendered.

Any Offer to Purchase shall be governed by and effected in accordance with
the Offer for such Offer to Purchase.

"Officers' Certificate" means a certificate signed by the Chairman of the
board of directors of the Company, a Vice Chairman of the board of directors
of the Company, the President or a Vice President, and by the Chief Financial
Officer, the Chief Accounting Officer, the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee, which shall comply with the Indenture.

"Opinion of Counsel" means an opinion of counsel acceptable to the Trustee
(who may be counsel to the Company, including an employee of the Company).

"Permitted Holders" means any Person who was the beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act) of stock of the Company on
March 31, 1997, and any Affiliates of such Person (i) who were Affiliates of
such Person on March 31, 1997 or (ii) who were formed, directly or indirectly,
by any such Person after March 31, 1997, provided, however, that Persons who
were beneficial owners (within the meaning of Rule 13d-3 under the Exchange
Act) of such Person on March 31, 1997 continued to be beneficial owners
(within the meaning of Rule 13d-3 under the Exchange Act) at the time of
formation of such Affiliate.

"Permitted Interest Rate or Currency Protection Agreement" of any Person
means any Interest Rate or Currency Protection Agreement entered into with one
or more financial institutions in the ordinary course of business that is
designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt
being hedged thereby and not for purposes of speculation.

"Permitted Investments" means (a) Cash Equivalents; (b) Investments in
prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits; (c)
loans, advances or extensions of credit to employees and directors made in the
ordinary course of business and consistent with past practice; (d) obligations
under Interest Rate or Currency Protection Agreements; (e) bonds, notes,
debentures and other securities received as a result of Asset Dispositions
pursuant to and in compliance with "--Certain Covenants--Limitation on Asset
Dispositions"; (f) Investments made in the ordinary course of business as
partial payment for constructing a network relating to a Telecommunications
Business; (g) commercially reasonable extensions of trade credit; (h)
Investments in any Person as a result of which such Person becomes a
Restricted Subsidiary; (i) Investments in Permitted Joint Ventures in an
aggregate amount not to exceed $25 million; (j) Investments in Affiliates or
Related Persons in an aggregate amount not to exceed $11 million, provided
that the making of such Investments is permitted under "--Certain Covenants--
Transactions with Affiliates and Related Persons"; and (k) Investments in an
aggregate amount not to exceed $15 million consisting of the contribution by
the Company or any Restricted Subsidiary of assets located in Mexico to joint
ventures in which the Company or a Restricted Subsidiary has an interest.

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"Permitted Joint Venture" means a corporation, partnership or other entity
other than a Restricted Subsidiary engaged in one or more Telecommunications
Businesses over which the Company and/or one or more Strategic Investors have,
directly or indirectly, the power to direct the policies, management and
affairs.

"Permitted Liens" means (a) Liens for taxes, assessments, governmental
charges, levies or claims which are not yet delinquent or which are being
contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with
generally accepted accounting principles shall have been made therefor; (b)
other Liens incidental to the conduct of the Company's and its Restricted
Subsidiaries' businesses or the ownership of its property and assets not
securing any Debt, and which do not in the aggregate materially detract from
the value of the Company's and its Restricted Subsidiaries' property or assets
when taken as a whole, or materially impair the use thereof in the operation
of its business; (c) Liens with respect to assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company or a Restricted
Subsidiary to secure Debt owing to the Company or such Restricted Subsidiary;
(d) Liens, pledges and deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types
of statutory obligations; (e) Liens, pledges or deposits made to secure the
performance of tenders, bids, leases, public or statutory obligations,
sureties, stays, appeals, indemnities, performance or other similar bonds and
other obligations of like nature Incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (f) zoning
restrictions, servitudes, easements, rights-of-way, restrictions and other
similar charges or encumbrances Incurred in the ordinary course of business
which, in the aggregate, do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the Company or its Restricted Subsidiaries; (g) Liens arising
out of judgments or awards against or other court proceedings concerning the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary is prosecuting an appeal or proceeding for review and
the Company or such Restricted Subsidiary is maintaining adequate reserves in
accordance with generally accepted accounting principles; and (h) any interest
or title of a lessor in the property subject to any lease other than a Capital
Lease.

"Permitted Telecommunications Capital Asset Disposition" means the transfer,
conveyance, sale, lease or other disposition of a capital asset that is a
Telecommunications Asset (including fiber, conduit and related equipment), (i)
the proceeds of which are treated as revenues by the Company in accordance
with generally accepted accounting principles and (ii) that, in the case of
the sale of fiber, would not result in the Company retaining less than 24
fibers per route mile on any segment of the Company's network.

"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization,
government or agency or political subdivision thereof or any other entity.

"Preferred Dividends" for any Person means for any period the quotient
determined by dividing the amount of dividends and distributions paid or
accrued (whether or not declared) on Preferred Stock of such Person during
such period calculated in accordance with generally accepted accounting
principles, by 1 minus the maximum statutory income tax rate then applicable
to the Company (expressed as a decimal).

"Preferred Stock" of any Person means Capital Stock of such Person of any
class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares
of Capital Stock of any other class of such Person.

"Public Equity Offering" means an underwritten public offering of common
stock made on a primary basis by the Company pursuant to a registration
statement filed with, and declared effective by, the Commission in accordance
with the Securities Act.

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"Purchase Money Debt" means Debt Incurred at any time within 270 days of,
and for the purposes of financing all or any part of the cost of, the
construction, installation, acquisition or improvement by the Company or any
Restricted Subsidiary of the Company of any new Telecommunications Assets
constructed, installed, acquired or improved after March 31, 1997, provided
that the proceeds of such Debt are expended for such purposes within such 270-
day period.

"Rating Decline" means the Notes cease to be rated B+ (or the equivalent
thereof) or better by Standard & Poor's Corporation or B2 (or the equivalent
thereof) or better by Moody's Investors Service, Inc.

"Receivables" means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money, excluding
allowances for doubtful accounts.

"Receivables Sale" of any Person means any sale of Receivables of such
Person (pursuant to a purchase facility or otherwise), other than in
connection with a disposition of the business operations of such Person
relating thereto or a disposition of defaulted Receivables for purposes of
collection and not as a financing arrangement.

"Related Person" of any Person means any other Person directly or indirectly
owning (a) 5% or more of the outstanding Common Stock of such Person (or, in
the case of a Person that is not a corporation, 5% or more of the outstanding
equity interest in such Person) or (b) 5% or more of the combined outstanding
voting power of the Voting Stock of such Person.

"Restricted Subsidiary" means a Subsidiary of the Company or of a Restricted
Subsidiary that is a Wholly Owned Subsidiary of the Company that has not been
designated by the board of directors of the Company (by a board resolution
delivered to the Trustee) as an Unrestricted Subsidiary pursuant to and in
compliance with "--Certain Covenants--Limitations on Designations of
Unrestricted Subsidiaries."

"Restricted Subsidiary Guarantee" means a supplemental indenture to the
Indenture in form satisfactory to the Trustee, providing for an unconditional
Guarantee of payment in full of the principal of, premium, if any, and
interest on the Notes. Any such Restricted Subsidiary Guarantee shall not be
subordinate in right of payment to any Debt of the Restricted Subsidiary
providing the Restricted Subsidiary Guarantee.

"Sale and Leaseback Transaction" of any Person means an arrangement with any
lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which
has been or is being sold or transferred by such Person more than 365 days
after the acquisition thereof or the completion of construction or
commencement of operation thereof to such lender or investor or to any Person
to whom funds have been or are to be advanced by such lender or investor on
the security of such property or asset. The stated maturity of such
arrangement shall be the date of the last payment of rent or any other amount
due under such arrangement prior to the first date on which such arrangement
may be terminated by the lessee without payment of a penalty.

"Stated Maturity," when used with respect to a Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.

"Strategic Investor" means a corporation, partnership or other entity
engaged in one or more Telecommunications Businesses that has, or 80% or more
of the Voting Stock of which is owned by a Person that has, an equity market
capitalization, at the time of its initial Investment in the Company or in a
Permitted Joint Venture with the Company, in excess of $2 billion.

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"Subordinated Debt" means Debt of the Company as to which the payment of
principal of (and premium, if any) and interest and other payment obligations
in respect of such Debt shall be subordinate to the prior payment in full of
the Notes to at least the following extent: (i) no payments of principal of
(or premium, if any) or interest on or otherwise due in respect of such Debt
may be permitted for so long as any default in the payment of principal (or
premium, if any) or interest on the Notes exists; (ii) in the event that any
other Default exists with respect to the Notes, upon notice by 25% or more in
principal amount of the Notes to the Trustee, the Trustee shall have the right
to give notice to the Company and the holders of such Debt (or trustees or
agents therefor) of a payment blockage, and thereafter no payments of
principal of (or premium, if any) or interest on or otherwise due in respect
of such Debt may be made for a period of 179 days from the date of such
notice; and (iii) such Debt may not (x) provide for payments of principal of
such Debt at the stated maturity thereof or by way of a sinking fund
applicable thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by the Company (including any redemption,
retirement or repurchase which is contingent upon events or circumstances but
excluding any retirement required by virtue of acceleration of such Debt upon
an event of default thereunder), in each case prior to the final Stated
Maturity of the Notes or (y) permit redemption or other retirement (including
pursuant to an offer to purchase made by the Company) of such other Debt at
the option of the holder thereof prior to the final Stated Maturity of the
Notes, other than a redemption or other retirement at the option of the holder
of such Debt (including pursuant to an offer to purchase made by the Company)
which is conditioned upon a change of control of the Company pursuant to
provisions substantially similar to those described under "--Certain
Covenants--Change of Control" (and which shall provide that such Debt will not
be repurchased pursuant to such provisions prior to the Company's repurchase
of the Notes required to be repurchased by the Company pursuant to the
provisions described under "--Certain Covenants--Change of Control").

"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs thereof.

"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended
for use in connection with a Telecommunications Business.

"Telecommunications Business" means the business of (i) transmitting, or
providing services relating to the transmission of, voice, video or data
through owned or leased transmission facilities, (ii) constructing, creating,
developing or marketing communications related network equipment, software and
other devices for use in a telecommunications business or (iii) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those identified in (i) or (ii) above; provided that the
determination of what constitutes a Telecommunications Business shall be made
in good faith by the board of directors of the Company.

"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such pursuant to and in compliance with "--Certain Covenants--Limitation on
Designations of Unrestricted Subsidiaries."

"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only for
so long as no senior class of securities has such voting power by reason of
any contingency.

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"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Voting Stock or other ownership interests (other than
directors' qualifying shares) of which shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.

EVENTS OF DEFAULT

The following will be Events of Default under the Indenture: (a) failure to
pay principal of (or premium, if any, on) any Note when due; (b) failure to
pay any interest on any Note when due, continued for 30 days; (c) default in
the payment of principal and interest on Notes required to be purchased
pursuant to an Offer to Purchase as described under "--Certain Covenants--
Change of Control" when due and payable; (d) failure to perform or comply with
the provisions described under "--Mergers, Consolidations and Sales of Assets"
and "--Certain Covenants--Limitation on Certain Asset Dispositions"; (e)
failure to perform any other covenant or agreement of the Company under the
Indenture or the Notes continued for 60 days after written notice to the
Company by the Trustee or holders of at least 25% in aggregate principal
amount of the outstanding Notes; (f) default under the terms of any instrument
evidencing or securing Debt of the Company or any Restricted Subsidiary having
an outstanding principal amount of $10 million individually or in the
aggregate which default results in the acceleration of the payment of such
indebtedness or constitutes the failure to pay such indebtedness when due
(after expiration of any applicable grace period); (g) the rendering of a
final judgment or judgments (not subject to appeal) against the Company or any
Restricted Subsidiary in an amount in excess of $10 million which remains
undischarged or unstayed for a period of 45 days after the date on which the
right to appeal has expired; and (h) certain events of bankruptcy, insolvency
or reorganization affecting the Company or any Restricted Subsidiary. Subject
to the provisions of the Indenture relating to the duties of the Trustee in
case an Event of Default (as defined) shall occur and be continuing, the
Trustee will not be under any obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the holders
of Notes, unless such holders shall have offered to the Trustee reasonable
indemnity. Subject to such provisions for the indemnification of the Trustee,
the holders of a majority in aggregate principal amount of the outstanding
Notes will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee.

If any Event of Default (other than an Event of Default described in clause
(h) above) shall occur and be continuing, either the Trustee or the holders of
at least 25% in aggregate principal amount of the outstanding Notes may
accelerate the maturity of all Notes; provided, however, that after such
acceleration, but before a judgment or decree based on acceleration, the
holders of a majority in aggregate principal amount of the outstanding Notes
may, under certain circumstances, rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal, have
been cured or waived as provided in the Indenture. If an Event of Default
specified in clause (h) above occurs, the outstanding Notes will ipso facto
become immediately due and payable without any declaration or other act on the
part of the Trustee or any holder. For information as to waiver of defaults,
see "--Amendment, Supplement and Waiver."

No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder
shall have previously given to the Trustee written notice of a continuing
Event of Default (as defined) and unless also the holders of at least 25% in
aggregate principal amount of the outstanding Notes shall have made written
request and offered reasonable indemnity to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the
holders of a majority in aggregate principal amount of the outstanding Notes a
direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. However, such limitations do not apply to a
suit instituted by a holder of a Note for enforcement of payment of the
principal of and premium, if any, or interest on such Note on or after the
respective due dates expressed in such Note.

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The Company will be required to furnish to the Trustee quarterly a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.

AMENDMENT, SUPPLEMENT AND WAIVER

The Company and the Trustee may, at any time and from time to time, without
notice to or consent of any holder of Notes, enter into one or more indentures
supplemental to the Indenture (1) to evidence the succession of another Person
to the Company and the assumption by such successor of the covenants of the
Company in the Indenture and the Notes; (2) to add to the covenants of the
Company, for the benefit of the holders, or to surrender any right or power
conferred upon the Company by the Indenture; (3) to add any additional Events
of Default; (4) to provide for uncertificated Notes in addition to or in place
of certificated Notes; (5) to evidence and provide for the acceptance of
appointment under the Indenture of a successor Trustee; (6) to secure the
Notes; or (7) to cure any ambiguity in the Indenture to correct or supplement
any provision in the Indenture which may be inconsistent with any other
provision therein or to add any other provisions with respect to matters or
questions arising under the Indenture; provided such actions shall not
adversely affect the interests of the holders in any material respect.

With the consent of the holders of not less than a majority in principal
amount of the outstanding Notes, the Company and the Trustee may enter into
one or more indentures supplemental to the Indenture for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or modifying in any manner the rights of the
holders, provided that no such supplemental indenture shall, without the
consent of the holder of each outstanding Note (1) change the Stated Maturity
of the principal of, or any installment of interest on, any Note, or alter the
redemption provisions thereof, or reduce the principal amount thereof (or
premium, if any), or the interest thereon that would be due and payable upon
maturity thereof, or change the place of payment where, or the coin or
currency in which, any Note or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on
or after the maturity thereof; (2) reduce the percentage in principal amount
of the outstanding Notes, the consent of whose holders is necessary for any
such supplemental indenture or required for any waiver of compliance with
certain provisions of the Indenture or certain Defaults thereunder; (3)
subordinate in right of payment, or otherwise subordinate, the Notes to any
other Debt; or (4) modify any provision of this paragraph (except to increase
any percentage set forth herein).

The holders of not less than a majority in principal amount of the
outstanding Notes may, on behalf of the holders of all the Notes waive any
past Default under the Indenture and its consequences, except Default (1) in
the payment of the principal of (or premium, if any) or interest on any Note,
or (2) in respect of a covenant or provision hereof which under the proviso to
the prior paragraph cannot be modified or amended without the consent of the
holder of each outstanding Note affected.

SATISFACTION AND DISCHARGE OF THE INDENTURE, DEFEASANCE

The Company may terminate its obligations under the Indenture when (i)
either (A) all outstanding Notes have been delivered to the Trustee for
cancellation or (B) all such Notes not theretofore delivered to the Trustee
for cancellation have become due and payable, will become due and payable
within one year or are to be called for redemption within one year under
irrevocable arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name and at the expense of the Company,
and the Company has irrevocably deposited or caused to be deposited with the
Trustee funds in an amount sufficient to pay and discharge the entire
indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of (or premium, if any, on) and interest to the
date of deposit or maturity or date of redemption on such Notes; (ii) the
Company has paid or caused to be paid all other sums payable by the Company
under the Indenture; and (iii) the Company has delivered an Officers'
Certificate and an Opinion of Counsel relating to compliance with the
conditions set forth in the Indenture.

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The Company, at its election, shall (a) be deemed to have paid and
discharged its debt on the Notes and the Indenture shall cease to be of
further effect as to all outstanding Notes (except as to (i) rights of
registration of transfer, substitution and exchange of Notes and the Company's
right of optional redemption, (ii) rights of holders to receive payments of
principal of, premium, if any, and interest on such Notes (but not the
Purchase Price referred to under "--Certain Covenants--Change of Control") and
any rights of the holders with respect to such amounts, (iii) the rights,
obligations and immunities of the Trustee under the Indenture and (iv) certain
other specified provisions in the Indenture) or (b) cease to be under any
obligation to comply with certain restrictive covenants including those
described under "--Certain Covenants," after the irrevocable deposit by the
Company with the Trustee, in trust for the benefit of the holders, at any time
prior to the maturity of the Notes, of (A) money in an amount, (B) Government
Securities which through the payment of interest and principal will provide,
not later than one day before the due date of payment in respect of the Notes,
money in an amount, or (C) a combination thereof, sufficient to pay and
discharge the principal of, and interest on, the Notes then outstanding on the
dates on which any such payments are due in accordance with the terms of the
Indenture and of the Notes. Such defeasance or covenant defeasance shall be
deemed to occur only if certain conditions are satisfied, including, among
other things, delivery by the Company to the Trustee of an Opinion of Counsel
acceptable to the Trustee to the effect that (i) such deposit, defeasance and
discharge will not be deemed, or result in, a taxable event for federal income
tax purposes with respect to the holders; and (ii) the Company's deposit will
not result in the Trust or the Trustee being subject to regulation under the
Investment Company Act of 1940.

GOVERNING LAW

The Indenture and the Notes will be governed by the laws of the State of New
York.

THE TRUSTEE

Bankers Trust Company will be the Trustee under the Indenture. The Trustee's
current address is 123 Washington Street, 1st Floor, New York, New York 10006.

The holders of not less than a majority in principal amount of the
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee,
subject to certain exceptions. Except during the continuance of an Event of
Default, the Trustee will perform only such duties are specifically set forth
in the Indenture. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured or waived), the Trustee will be
required, in the exercise of its rights and powers under the Indenture, to use
the degree of care of a prudent person in the conduct of such person's own
affairs.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

No director, officer, employee, incorporator or stockholder of the Company,
as such, shall have any liability for any obligations of the Company under the
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation, solely by reason of its status as a
director, officer, employee, incorporator or stockholder of the Company. By
accepting a Note each holder waives and releases all such liability (but only
such liability). The waiver and release are part of the consideration for
issuance of the Notes. Nevertheless, such waiver may not be effective to waive
liabilities under the federal securities laws and it has been the view of the
Commission that such a waiver is against public policy.

TRANSFER AND EXCHANGE

A holder may transfer or exchange Notes in accordance with the Indenture.
The Company, the Registrar and the Trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a holder to pay any taxes and fees required by law or
permitted by the Indenture.

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EXCHANGE OFFER; REGISTRATION RIGHTS

The Company has entered into a registration rights agreement with the
Initial Purchasers (the "Registration Agreement") pursuant to which the
Company agreed, for the benefit of the holders of the Old Notes, at the
Company's cost, (a) by June 30, 1997, to file a registration statement (a
"Registration Statement") with the Commission with respect to a registered
offer to exchange the Notes for the Exchange Notes, (b) to use its best
efforts to cause such Registration Statement to be declared effective under
the Securities Act by August 28, 1997, and (c) to consummate the Exchange
Offer by September 29, 1997. For each Old Note surrendered to the Company
pursuant to the Exchange Offer, the holder of such Old Note will receive an
Exchange Note having a principal amount equal to that of the surrendered Old
Note.

Based upon no-action letters issued by the staff of the Commission to third
parties, the Company believes that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes would in general be freely
transferable after the Exchange Offer without further registration under the
Securities Act if the holder of the Exchange Notes represents (i) that it is
not an "affiliate," as defined in Rule 405 of the Securities Act, of the
Company, (ii) that it is acquiring the Exchange Notes in the ordinary course
of its business and (iii) that it has no arrangement or understanding with any
person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes; provided that, in the case of broker-
dealers, a prospectus meeting the requirements of the Securities Act be
delivered as required. However, the Commission has not considered the Exchange
Offer in the context of a no-action letter and there can be no assurance that
the staff of the Commission would make a similar determination with respect to
the Exchange Offer as in such other circumstances. Holders of Old Notes
wishing to accept the Exchange Offer must represent to the Company that such
conditions have been met. Each broker-dealer that receives Exchange Notes for
its own account pursuant to the Exchange Offer, where it acquired the Old
Notes exchanged for such Exchange Notes for its own account as a result of
market-making or other trading activities, may be deemed to be an
"underwriter" within the meaning of the Securities Act and must acknowledge
that it will deliver a prospectus in connection with the resale of such
Exchange Notes. The Letter of Transmittal states that by so acknowledging and
by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Notes received
in exchange for Old Notes where such Old Notes were acquired by such broker-
dealer as a result of market-making activities or other trading activities.
The Company has agreed that, for a period of one year after consummation of
the Exchange Offer, it will make this Prospectus available to any broker-
dealer for use in connection with any such resale. A broker-dealer that
delivers such a prospectus to purchasers in connection with such resales will
be subject to certain of the civil liability provisions under the Securities
Act, and will be bound by the provisions of the Registration Agreement
(including certain indemnification and contribution rights and obligations).
See "The Exchange Offer--Resale of the Exchange Notes" and "Plan of
Distribution."

Each holder of the Old Notes (other than certain specified holders) who
wishes to exchange Old Notes for Exchange Notes in the Exchange Offer will be
required to represent that (a) it is not an affiliate of the Company, (b) any
Exchange Notes to be received by it will be acquired in the ordinary course of
its business and (c) at the time of commencement of the Exchange Offer, it has
no arrangement with any person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes. If the holder is a
broker-dealer (a "Participating Broker-Dealer") who acquired the Notes for its
own account as a result of market-making or other trading activities, it may
be deemed to be an "underwriter" within the meaning of the Securities Act and
will be required to acknowledge that it must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Notes. The Commission has taken the position that Participating
Broker-Dealers may fulfill their prospectus delivery requirements with respect
to the Exchange Notes (other than a resale of an unsold allotment from the
original sale of the Old Notes) with the prospectus

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contained in the Exchange Offer Registration Statement. Under the Registration
Agreement, the Company is required to allow Participating Broker-Dealers and
other persons, if any, subject to similar prospectus delivery requirements to
use the prospectus contained in the Exchange Offer Registration Statement in
connection with the resale of such Exchange Notes.

If, (i) because of any change in law or applicable interpretations thereof
by the Commission's staff, the Company determines upon advice of its outside
counsel that it is not permitted to effect the Exchange Offer as contemplated
by the Registration Agreement, or (ii) for any other reason the Exchange Offer
is not consummated within 180 days of the Closing Date, or (iii) any Initial
Purchaser so requests with respect to Notes held by it following consummation
of the Exchange Offer, or (iv) any holder of Notes (other than an Initial
Purchaser) is not eligible to participate in the Exchange Offer or (v) in the
case of any Initial Purchaser that participates in the Exchange Offer or
acquires Exchange Notes issued and delivered to it by the Company in exchange
for Notes, such Purchaser does not receive freely tradeable Exchange Notes in
exchange for Notes constituting any portion of an unsold allotment, the
Company will, at its cost, (a) as promptly as practicable, file a shelf
registration statement (a "Shelf Registration Statement") with the Commission
relating to the offer and sale of the Notes or the Exchange Notes, (b) cause
such Shelf Registration Statement to be declared effective under the
Securities Act and (c) use its best efforts to keep such Shelf Registration
Statement continuously effective under the Securities Act for a period of
three years or such shorter period that will terminate when all the Notes or
Exchange Notes, as applicable, covered by such Shelf Registration Statement
have been sold. The Company will, in the event of filing such a Shelf
Registration Statement, provide to each holder of the Notes copies of the
prospectus that is a part of such Shelf Registration Statement, notify each
such holder when such Shelf Registration Statement for the Notes has been
filed with the Commission and when such Shelf Registration Statement or any
post-effective amendment thereto has become effective and take certain other
actions as are required to permit unrestricted resales of the Notes. A holder
of Notes that sells such Notes pursuant to a Shelf Registration Statement
generally will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers, will be subject
to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Agreement which are applicable to such a holder (including
certain indemnification and contribution rights and obligations).

The Old Notes provide that if (i) the Registration Statement has not been
filed with the Commission within 90 days after the Closing Date or declared
effective within 150 days after the Closing Date, or the Exchange Offer has
not been consummated within 180 days after the Closing Date or (ii) in lieu
thereof, the Shelf Registration Statement has not been filed with the
Commission and declared effective within 210 days after the Closing Date or
(iii) after either the Registration Statement or the Shelf Registration
Statement has been declared effective, as the case may be, such Registration
Statement thereafter ceases to be effective or usable (subject to certain
exceptions) in connection with resales of Notes or Exchange Notes in
accordance with and during the periods specified in the Registration Agreement
(each such event referred to in clauses (i) through (iii), a "Registration
Default"), additional interest ("Liquidated Interest") will accrue on the Old
Notes (in addition to the stated interest on the Old Notes) from and including
the date on which any such Registration Default shall occur to but excluding
the date on which all Registration Defaults have been cured. Liquidated
Interest will be payable in cash semiannually in arrears each April 1 and
October 1, at a rate per annum equal to 0.50% of the principal amount of the
Old Notes during the 90-day period immediately following the occurrence of any
Registration Default and shall increase by 0.25% per annum of the principal
amount of the Old Notes at the end of each subsequent 90-day period, but in no
event shall such rates exceed 2.00% per annum in the aggregate regardless of
the number of Registration Defaults.

The summary herein of certain provisions of the Registration Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Registration Agreement, a copy of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

CREDIT FACILITIES

QC is the borrower under a $100.0 million revolving credit facility with
certain commercial lending institutions and ABN AMRO North America, Inc. as
agent for the lenders. The credit facility is secured by pledges of publicly
traded stock owned by an affiliate of Anschutz Company and is being used to
provide working capital and capital expansion funds to QCC. The credit
facility is structured as a three-year revolving bank credit facility which
converts to a two-year term loan that matures on April 2, 2001. Borrowings
bear interest at an adjustable rate based on the agent's prime rate or LIBOR
plus an applicable margin. On March 31, 1997, the Company paid down the $80.0
million balance under this facility with a portion of the net proceeds of the
sale of the Notes. In May 1997 (following receipt of the proceeds under the
GTE agreement), the Company borrowed $28.0 million under this facility and
used this amount to repay all outstanding advances from the Company's parent,
the proceeds of which were used to fund network construction capital
expenditures and working capital. The outstanding balance under this facility
was repaid with cash generated from operations.

The facility contains covenants that, among other things, restrict QC's use
of the loan proceeds to working capital, capital expenditures and general
corporate purposes of QC and its subsidiaries and limit QC's ability to make
certain dividends, distributions or investments, and mergers. The facility
also requires certain collateral value to outstanding amount ratios to be
maintained. The facility generally permits dividends or distributions on
capital stock in amounts necessary to service scheduled principal and interest
payments on debt of the Company of up to a maximum of $450.0 million principal
amount plus amounts not to exceed 50% of consolidated net income, and other
amounts for certain taxes and an annual $2.0 million basket. The facility
contains certain events of default including, among other things, failure to
pay, breach of the agreement and insolvency. An event of default also occurs
if obligations under the facility cease to rank pari passu with other
unsecured obligations. Upon the occurrence of an event of default, the
facility permits the lenders to declare all outstanding borrowings to be
immediately due and payable and to proceed against the collateral.

QC also has a one-year $50.0 million line of credit from ABN AMRO. The
facility is secured by pledges of publicly traded stock owned by an affiliate
of Anschutz Company and is being used to provide working capital to QCC. The
facility contains, except for terms of repayment, substantially identical
terms as the $100.0 million revolving credit facility described above. No
amounts are, or ever have been, outstanding under the facility.

The Company intends to terminate the latter two existing credit facilities
totalling $150.0 million as soon as practicable after completion of the
Initial Public Offering. The Company intends to obtain new bank credit
facilities of lesser amount, which may be secured or unsecured, as permitted
under the Indenture. The Company is in discussions with various potential
lenders in this regard. The Company also may issue other public or private
debt. No credit support will be provided by the Company's parent for any new
facilities. No assurance can be given as to when or whether the Company will
be able to obtain new credit facilities on acceptable terms.

VENDOR FINANCING

The Company and Nortel, individually and as agent for itself and other
specified lenders, entered into a $90.0 million credit agreement dated as of
May 6, 1997 to finance the transmission electronics equipment to be purchased
from Nortel under a procurement agreement. Under this credit agreement, the
Company may borrow funds as it purchases the equipment to fund up to 75% of
the purchase price of such equipment and related engineering and installation
services provided by Nortel, with the purchased equipment and related items
serving as the collateral for the loans. Principal amounts outstanding under
the credit agreement will be payable in quarterly installments commencing on
June 30, 2000, with repayment in full due and payable on March 31, 2004.
Borrowings will bear interest at

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the Company's option at either: (i) a floating base rate announced by a
designated reference bank plus an applicable margin; or (ii) LIBOR plus an
applicable margin.

The credit agreement contains covenants that, among other things, restrict
application of the loan proceeds to the purchase of the Nortel equipment and
related engineering and installation services provided by Nortel, place
limitations on certain asset dispositions and sales of collateral, and require
QCC's direct compliance with the debt-service ratios to which it is subject as
a Restricted Subsidiary under the Indenture for the Notes. Initial extensions
of credit are subject to certain conditions, among others, requiring that QCC
deliver to the agent for the benefit of the lenders security interests, in form
and substance satisfactory to the agent, in the equipment to be purchased. The
credit agreement generally permits QCC to pay dividends and make distributions
in respect to its capital stock except where such payments would impair QCC's
ability, for the three-month period following such dividend or distribution, to
repay indebtedness incurred under the credit agreement, and authorizes QCC to
pay dividends and make distributions to Qwest in order to allow Qwest to
satisfy its obligations with respect to the Notes and other debt that is solely
an obligation of Qwest. The credit agreement contains certain events of default
including, among other things, failure to pay, breach of the agreement and
insolvency. Upon the occurrence of an event of default, the credit agreement
permits the agent to declare all borrowings to be immediately due and payable,
terminate loan commitments and/or proceed against the collateral.

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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a general discussion of certain of the expected United
States federal income tax consequences applicable to holders of the Old Notes
who purchased the Old Notes for the stated principal amount of the Old Notes
pursuant to the Offering, who exchange the Old Notes for Exchange Notes
pursuant to the Exchange Offer, and who hold the Old Notes and will hold the
Exchange Notes as capital assets (such persons are referred to herein as
"Holders"). Qwest has received an opinion of its counsel, Holme Roberts & Owen
LLP, that the following summarizes the material federal income tax consequences
expected to result to Holders, subject to the conditions, limitations, and
assumptions described herein. This discussion is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), the applicable Treasury
regulations ("Regulations"), and public administrative and judicial
interpretations of the Code and Regulations as of the date of this Prospectus,
all of which are subject to change, which changes could be applied
retroactively. This discussion is also based upon information contained in this
Prospectus and the related documents, and upon certain representations from
Qwest as to factual matters. This discussion does not purport to cover all
aspects of federal taxation that may be relevant to, or the actual tax effect
that any of the matters described herein will have on, any particular Holder
and does not address foreign, state, or local tax consequences.

Qwest has not sought and will not seek any rulings from the Internal Revenue
Service (the "IRS" or the "Service") with respect to the Notes. There can be no
assurance that the Service will not take a different position concerning the
tax consequences of the exchange of Old Notes for Exchange Notes or the
ownership or disposition of the Exchange Notes or that the Service's position
would not be sustained by a court.

The federal income tax consequences applicable to a Holder may vary depending
upon the Holder's particular situation or status. Holders that are subject to
special rules under the Code (including insurance companies, tax-exempt
organizations, mutual funds, retirement plans, financial institutions, dealers
in securities or foreign currency, persons who hold the Notes as part of a
"straddle" or as a "hedge" against currency risk or in connection with a
conversion transaction, persons who have a functional currency other than the
United States dollar, investors in pass-through entities, and except as
expressly addressed herein, Non-U.S. Holders (as defined below)) may be subject
to special rules not discussed below. Qwest will classify the Notes as debt
under section 385 of the Code.

As used in this discussion, the term "U.S. Holder" means a Holder that, for
United States federal income tax purposes, is (i) a citizen or resident of the
United States, (ii) a corporation or partnership created or organized in or
under the laws of the United States or of any State, (iii) an estate the income
of which is subject to United States federal income tax, regardless of its
source, or (iv) a trust if (a) a court within the United States is able to
exercise primary supervision over the administration of the trust and (b) one
or more United States fiduciaries have the authority to control all substantial
decisions of the trust. The term "Non-U.S. Holder" means a Holder that is, for
United States federal income tax purposes, not a U.S. Holder.

THIS DISCUSSION IS FOR GENERAL INFORMATION PURPOSES ONLY. EACH HOLDER OF AN
OLD NOTE IS EXPECTED AND URGED TO CONSULT ITS OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO SUCH PERSON OF EXCHANGING OLD NOTES FOR EXCHANGE
NOTES AND OF HOLDING AND DISPOSING OF THE EXCHANGE NOTES, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY FOREIGN, STATE, OR LOCAL TAX LAWS AND OF ANY
CHANGE IN FEDERAL INCOME TAX LAW OR ADMINISTRATIVE OR JUDICIAL INTERPRETATION
THEREOF SINCE THE DATE OF THIS PROSPECTUS.

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EXCHANGE OF NOTES

Although there is no direct authority as to whether the exchange of Old
Notes for Exchange Notes pursuant to the Exchange Offer will be treated as a
taxable exchange for United States federal income tax purposes, it is the
opinion of Holme Roberts & Owen LLP, counsel to Qwest, that based upon its
analysis of applicable law, such exchange should not be treated as a taxable
exchange for United States federal income tax purposes. A Holder should not
recognize gain or loss upon the exchange of Old Notes for Exchange Notes and,
upon such exchange, should have the same adjusted tax basis in and holding
period for the Exchange Notes as it had in the Old Notes immediately prior to
the exchange.

STATED INTEREST

Qwest was advised by the Initial Purchasers at the time of the sale of the
Old Notes that the Initial Purchasers intended to sell the Old Notes at a
price equal to the stated principal amount of the Old Notes, and Qwest
believes that substantially all of the Old Notes were sold to investors at
that price. This discussion is, therefore, based upon the assumption that the
Old Notes were not issued with original issue discount for federal income tax
purposes. A U.S. Holder is required to include stated interest on the Exchange
Notes in gross income as accrued or received, in accordance with such U.S.
Holder's regular method of tax accounting.

This discussion does not address special rules that may apply to purchasers
who acquired the Old Notes (or who may acquire the Exchange Notes) at a price
that differs from the adjusted issue price of the Notes at the time of
acquisition, including those provisions of the Code and Regulations relating
to the treatment of "market discount," "acquisition premium," and "amortizable
bond premium." Such purchasers should consult their tax advisors regarding
these matters.

SALE, RETIREMENT, OR OTHER TAXABLE DISPOSITION

General. Upon the sale, retirement, or other taxable disposition of a Note,
a U.S. Holder will generally recognize gain or loss measured by the difference
between (i) the amount of cash plus the fair market value of property received
in exchange therefor (except to the extent that the consideration received is
attributable to stated interest not previously taken into account, which
consideration will be treated as ordinary interest income) and (ii) such U.S.
Holder's adjusted tax basis in the Note.

Character. Any gain or loss on the sale, retirement, or other taxable
disposition of a Note, measured as described above, will generally be capital
gain or loss, provided that the Note was a capital asset in the hands of the
U.S. Holder. Any capital gain or loss will be long-term capital gain or loss
if the Note has been held for more than one year at the time of disposition;
otherwise, the capital gain or loss will be short-term capital gain or loss.

Defeasance. With respect to tax matters related to legal defeasance and
covenant defeasance in certain circumstances, see "Description of the Notes--
Satisfaction and Discharge of the Indenture, Defeasance."

BACKUP WITHHOLDING

The backup withholding rules of the Code require a payor to deduct and
withhold a tax amount if (i) the payee fails to furnish a taxpayer
identification number ("TIN") to the payor, (ii) the Service notifies the
payor that the TIN furnished by the payee is incorrect, (iii) the payee has
failed properly to report the receipt of a "reportable payment" and the
Service has notified the payor that withholding is required, or (iv) there has
been a failure on the part of the payee to certify under penalty of perjury
that the payee is not subject to withholding under section 3406 of the Code.
If any one of the events discussed above occurs, Qwest or its paying agent or
other withholding agent will be required to withhold a tax equal to 31 percent
of any "reportable payment" which includes, among other things,

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<PAGE>

interest actually paid, original issue discount, and amounts paid through
brokers in retirement of securities. Any amount withheld from a payment to a
U.S. Holder under the backup withholding rules will be allowed as a refund or
credit against such U.S. Holder's United States federal income tax, provided
that the required information is furnished to the Service. Certain U.S.
Holders (including, among others, corporations) are not subject to the backup
withholding information reporting requirements.

TAX CONSEQUENCES TO NON-U.S. HOLDERS

General. The following discussion is for general information purposes only
and does not purport to cover all aspects of United States federal income
taxation that may apply to, or the actual tax effect that any of the matters
described herein will have on, any particular Non-U.S. Holder. Non-U.S.
Holders are expected and urged to consult their own tax advisors as to the
particular tax consequences to them of acquiring, holding, and disposing of
the Notes.

Portfolio Interest Exemption. A Non-U.S. Holder will generally, under the
portfolio interest exemption of the Code, not be subject to United States
federal income taxes or United States federal withholding tax, on payments of
principal, if any, on the Notes, and interest paid on the Notes, provided that
(i) the Non-U.S. Holder does not actually or constructively own 10 percent or
more of the total combined voting power of all classes of stock of the Company
entitled to vote, (ii) the Non-U.S. Holder is not (a) a bank receiving
interest pursuant to a loan agreement entered into in the ordinary course of
its trade or business or (b) a controlled foreign corporation that is related
to Qwest through stock ownership, (iii) such interest is not effectively
connected with a United States trade or business and (iv) either (a) the
beneficial owner of the Notes certifies to Qwest or its agent, under penalties
of perjury, that it is not a U.S. Holder and provides a completed IRS Form W-8
("Certificate of Foreign Status") or (b) a securities clearing organization,
bank, or other financial institution which holds customers' securities in the
ordinary course of its trade or business (a "financial institution") and holds
the Notes, certifies to Qwest or its agent, under penalties of perjury, that
it has received Form W-8 from the beneficial owner or that it has received
from another financial institution a Form W-8 and furnishes the payor with a
copy thereof. If any of the situations described in proviso (i), (ii), or (iv)
of the preceding sentence do not exist, interest on the Notes, when received,
is subject to United States withholding tax at the rate of 30 percent, unless
an income tax treaty between the United States and the country of which the
Non-U.S. Holder is a tax resident provides for the elimination or reduction in
the rate of United States federal withholding tax.

If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest on the Note is effectively connected with the conduct of such
trade or business, such Non-U.S. Holder, although exempt from United States
federal withholding tax as discussed in the preceding paragraph (or by reason
of the delivery of a properly completed IRS Form 4224), will be subject to
United States federal income tax on such interest and on any gain realized on
the sale, exchange, or other disposition of a Note in the same manner as if it
were a U.S. Holder. In addition, if such Non-U.S. Holder is a foreign
corporation, it may be subject to a branch profits tax equal to 30 percent of
its effectively connected earnings and profits for that taxable year, unless
it qualifies for a lower rate under an applicable income tax treaty.

Federal Estate Tax. Notes owned or treated as owned by an individual who is
neither a United States citizen nor a United States resident (as defined for
United States federal estate tax purposes) at the time of death will be
excluded from the individual's gross estate for United States federal estate
tax purposes and will not be subject to United States federal estate tax if
the nonresident qualifies for the portfolio interest exemption discussed
above.

Sale of Exchange Notes. A Non-U.S. Holder generally will not be subject to
United States federal income tax on any gain realized in connection with the
sale, exchange, or retirement of Notes, unless

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(i)(a) the gain is effectively connected with a trade or business carried on by
the Non-U.S. Holder within the United States or (b) if a tax treaty applies,
the gain is generally attributable to the United States permanent establishment
maintained by the Non-U.S. Holder, (ii) in the case of a Non-U.S. Holder who is
an individual, such Non-U.S. Holder is present in the United States for 183
days or more in the taxable year of disposition and certain other conditions
are satisfied, or (iii) the Non-U.S. Holder is subject to tax pursuant to
provisions of the Code applicable to United States expatriates.

Information Reporting and Backup Withholding Tax. In general, there is no
United States information reporting requirement or backup withholding tax on
payments to Non-U.S. Holders who provide the appropriate certification
described above regarding qualification for the portfolio interest exemption
from United States federal income tax for payments of interest on the Notes.

In general, backup withholding and information reporting will not apply to a
payment of the gross proceeds of a sale of Notes effected at a foreign office
of a broker. If, however, such broker is, for United States federal income tax
purposes, a United States person, a controlled foreign corporation, or a
foreign person, 50 percent or more of whose gross income for certain periods is
derived from activities that are effectively connected with the conduct of a
trade or business in the United States, such payments will not be subject to
backup withholding but will be subject to information reporting, unless (i)
such broker has documentary evidence in its records that the beneficial owner
is a Non-U.S. Holder and certain other conditions are met or (ii) the
beneficial owner otherwise establishes an exemption. Temporary Regulations
provide that the United States Department of Treasury is considering whether
backup withholding should be required in such circumstances. Under proposed
Regulations not currently in effect, backup withholding will not apply to such
payments absent actual knowledge that the payee is a United States person.
Recently proposed Regulations (the "New Proposed Regulations") would provide
alternative methods for satisfying the certification requirement described in
clause (iv)(a) and (b) under "--Portfolio Interest Exemption" above. The New
Proposed Regulations also would require, in the case of Notes held by foreign
partnerships, that (i) the certification described in clause (iv)(a) and (b)
under "--Portfolio Interest Exemption" above be provided by the partners rather
than by the foreign partnership and (ii) the partnership provide certain
information, including a United States taxpayer identification number. A look-
through rule would apply in the case of tiered partnerships. The New Proposed
Regulations are proposed to be effective for payments made after December 31,
1997. There can be no assurance that the New Proposed Regulations will be
adopted or as to the provisions they will include if and when adopted in
temporary or final form. Non-U.S. Holders should consult their own tax advisors
regarding the application of these rules to their particular situations, the
availability of an exemption therefrom, the procedure for obtaining such an
exemption, if available, and the possible application of the Proposed
Regulations addressing the withholding and the information reporting rules.

Payment by Qwest of principal on the Notes or payment by a United States
office of a broker of the proceeds of a sale of Notes is subject to both backup
withholding and information reporting unless the beneficial owner provides a
completed IRS Form W-8 which certifies under penalty of perjury that it is a
Non-U.S. Holder who meets all the requirements for exemption from United States
federal income tax on any gain from the sale, exchange, or retirement of the
Notes. Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules will be allowed as a refund or a credit against
such Non-U.S. Holder's United States federal income tax liability, provided the
required information is furnished to the Service.

PLAN OF DISTRIBUTION

Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may
be amended or supplemented from time to time, may be

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used by a broker-dealer in connection with resales of Exchange Notes received
in exchange for Old Notes where such Old Notes were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that for a period of one year after consummation of the Exchange Offer, it will
make this Prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale.

The Company will not receive any proceeds from any sale of Exchange Notes by
any broker-dealer. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any broker-
dealer that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of Exchange
Notes and any commissions or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

For a period of one year after consummation of the Exchange Offer, the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the letter of transmittal. The Company has agreed to pay all
expenses incident to the Company's performance of, or compliance with, the
Registration Agreement and all expenses incident to the Exchange Offer
(including the expenses of one counsel for the holders of the Old Notes) other
than commissions or concessions of any brokers or dealers, and will indemnify
the holders (including any broker-dealers) and certain parties related to the
holders against certain liabilities, including liabilities under the Securities
Act.

The Company has not entered into any arrangements or understandings with any
person to distribute the Exchange Notes to be received in the Exchange Offer.

LEGAL MATTERS

The validity of the Exchange Notes and certain other legal matters in
connection with the Exchange Notes offered hereby are being passed upon for the
Company by Holme Roberts & Owen LLP, Denver, Colorado with respect to matters
of United States law. Certain United States federal income tax matters will be
passed upon for the Company by Holme Roberts & Owen LLP, Denver, Colorado.

EXPERTS

The financial statements and schedules of Qwest Communications International
Inc. as of December 31, 1996 and 1995, and for each of the years in the three-
year period ended December 31, 1996, have been included herein and in the
Registration Statement in reliance upon the report, dated February 19, 1997,
except as to note 1, paragraph (i) and note 18, which are as of May 23, 1997,
of KPMG Peat Marwick LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

<TABLE>
<S> <C>
Independent Auditors' Report.............................................. F-2
Consolidated Balance Sheets of Qwest Communications International Inc. and
Subsidiaries as of December 31, 1996 and 1995 and March 31, 1997 (Unau-
dited)................................................................... F-3
Consolidated Statements of Operations of Qwest Communications Interna-
tional Inc. and
Subsidiaries for the years ended December 31, 1996, 1995 and 1994 and the
Three Months Ended March 31, 1997 and 1996 (Unaudited)................... F-4
Consolidated Statements of Stockholder's Equity of Qwest Communications
International Inc. and Subsidiaries for the years ended December 31,
1996, 1995 and 1994 and the Three Months Ended March 31, 1997 and 1996
(Unaudited).............................................................. F-5
Consolidated Statements of Cash Flows of Qwest Communications Interna-
tional Inc. and
Subsidiaries for the years ended December 31, 1996, 1995 and 1994 and the
Three Months Ended March 31, 1997 and 1996 (Unaudited)................... F-6
Notes to Consolidated Financial Statements of Qwest Communications Inter-
national Inc. and Subsidiaries (Information as of March 31, 1997 and for
the three months ended March 31, 1997 and 1996 is Unaudited)............. F-8
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Qwest Communications International Inc.:

We have audited the accompanying consolidated balance sheets of Qwest
Communications International Inc. and subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of operations, stockholder's
equity and cash flows for each of the years in the three-year period ended
December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Qwest
Communications International Inc. and subsidiaries as of December 31, 1996 and
1995, and the results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 1996, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Denver, Colorado
February 19, 1997, except as
to note 1, paragraph (i) and
note 18, which are as of May 23, 1997

F-2
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1996 AND 1995, AND MARCH 31, 1997 (UNAUDITED)
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
1997 1996 1995
----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................... $160,669 $ 6,905 $ 1,484
Accounts receivable, net (notes 4 and 7)..... 20,618 29,248 14,871
Costs and estimated earnings in excess of
billings (note 6)........................... 9,187 4,989 24,127
Deferred income tax asset (note 12).......... 2,008 6,301 4,392
Notes and other receivables (note 8)......... 14,967 14,934 6,253
Other current assets (note 14)............... 5,886 328 1,260
-------- -------- --------
Total current assets....................... 213,335 62,705 52,387
Property and equipment, net (notes 5, 9, 11 and
12)........................................... 231,228 186,535 114,748
Deferred income tax asset...................... 5,082 -- --
Notes and other receivables (note 8)........... 127 11,052 8,430
Intangible and other long-term assets, net of
amortization (notes 11 and 14)................ 19,842 3,967 8,613
-------- -------- --------
Total assets............................... $469,614 $264,259 $184,178
======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses (note
10)......................................... $ 98,761 $ 80,129 $ 26,748
Payable to related parties, net (note 13).... -- -- 2,983
Deferred revenue............................. 2,828 2,649 3,969
Billings in excess of costs and estimated
earnings (note 6)........................... 298 5,034 --
Current portion of long-term debt (note 11).. 24,859 25,193 21,270
Advances from Parent (note 13)............... 27,952 19,138 --
-------- -------- --------
Total current liabilities.................. 154,698 132,143 54,970
Long-term debt (note 11)....................... 286,325 109,268 68,793
Advances from Parent (note 13)................. -- -- 27,119
Deferred income tax liability (note 12)........ -- 1,708 922
Other liabilities (note 15).................... 23,925 11,698 5,899
-------- -------- --------
Total liabilities.......................... 464,948 254,817 157,703
-------- -------- --------
Stockholder's equity:
Preferred stock, $.01 par value. Authorized
25,000,000 shares. No shares issued and out-
standing (note 18).......................... -- -- --
Common stock, $.01 par value. Authorized
400,000,000 shares. Issued and outstanding
86,500,000 shares (note 18)................. 865 865 865
Additional paid-in capital (note 18)......... 55,027 55,027 65,093
Accumulated deficit.......................... (51,226) (46,450) (39,483)
-------- -------- --------
Total stockholder's equity................. 4,666 9,442 26,475
-------- -------- --------
Commitments and contingencies (note 14)
Total liabilities and stockholder's equi-
ty........................................ $469,614 $264,259 $184,178
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.

F-3
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- ----------------------------
1997 1996 1996 1995 1994
--------- --------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue:
Carrier services......... $ 11,199 $ 18,493 $ 57,573 $ 67,789 $ 50,240
Commercial services (note
13)..................... 9,411 7,013 34,265 20,412 8,712
--------- --------- -------- -------- --------
20,610 25,506 91,838 88,201 58,952
Network construction
services (note 6)....... 52,083 9,126 139,158 36,901 11,921
--------- --------- -------- -------- --------
72,693 34,632 230,996 125,102 70,873
--------- --------- -------- -------- --------
Operating expenses:
Telecommunications serv-
ices.................... 18,063 23,862 80,368 81,215 48,239
Network construction
services (note 13)...... 36,265 6,847 87,542 32,754 9,369
Selling, general and ad-
ministrative (notes 2
and 13)................. 13,947 14,527 45,755 37,195 21,516
Growth share plan (note
15)..................... 13,100 -- 13,100 -- --
Depreciation and amorti-
zation.................. 3,962 4,049 16,245 9,994 2,364
--------- --------- -------- -------- --------
85,337 49,285 243,010 161,158 81,488
--------- --------- -------- -------- --------
Loss from operations... (12,644) (14,653) (12,014) (36,056) (10,615)
Other income (expense):
Gain on sale of contract
rights (note 3)......... 7,710 -- -- -- --
Gain on sale of
telecommunications
service agreements (note
4)...................... -- -- 6,126 -- --
Interest expense, net.... (984) (1,351) (6,827) (4,248) (219)
Interest income.......... 680 769 2,454 1,782 191
Other (expense) income,
net (note 4)............ (1,996) (54) 60 55 (42)
--------- --------- -------- -------- --------
Loss before income tax
benefit............... (7,234) (15,289) (10,201) (38,467) (10,685)
Income tax benefit (note
12)....................... 2,458 5,310 3,234 13,336 3,787
--------- --------- -------- -------- --------
Net loss............... $ (4,776) $ (9,979) $ (6,967) $(25,131) $ (6,898)
========= ========= ======== ======== ========
Loss per share............. $ (.05) $ (.11) $ (.08) $ (.29) $ (.08)
========= ========= ======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
AND THE THREE MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK
----------------- ADDITIONAL TOTAL
NUMBER PAID-IN ACCUMULATED STOCKHOLDER'S
OF SHARES AMOUNT CAPITAL DEFICIT EQUITY
---------- ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCES, JANUARY 1,
1994................... 86,500,000 $865 $ 18,668 $ (7,454) $ 12,079
Contribution from Par-
ent.................... -- -- 20,900 -- 20,900
Repurchase of warrants.. -- -- (1,500) -- (1,500)
Net loss................ -- -- -- (6,898) (6,898)
---------- ---- -------- -------- --------
BALANCES, DECEMBER 31,
1994................... 86,500,000 865 38,068 (14,352) 24,581
Contribution from Par-
ent.................... -- -- 28,000 -- 28,000
Reduction in additional
paid-in capital
attributable to effect
of the tax allocation
agreement with Parent
(note 12).............. -- -- (975) -- (975)
Net loss................ -- -- -- (25,131) (25,131)
---------- ---- -------- -------- --------
BALANCES, DECEMBER 31,
1995................... 86,500,000 865 65,093 (39,483) 26,475
Cancellation of income
tax benefit receivable
from Parent (note 12).. -- -- (11,088) -- (11,088)
Expenses incurred by
Parent on Company's be-
half (note 13)......... -- -- 1,022 -- 1,022
Net loss................ -- -- -- (6,967) (6,967)
---------- ---- -------- -------- --------
BALANCES, DECEMBER 31,
1996................... 86,500,000 865 55,027 (46,450) 9,442
Net loss (Unaudited).... -- -- -- (4,776) (4,776)
---------- ---- -------- -------- --------
BALANCES, MARCH 31, 1997
(UNAUDITED)............ 86,500,000 $865 $ 55,027 $(51,226) $ 4,666
========== ==== ======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- --------------------------
1997 1996 1996 1995 1994
--------- --------- ------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss.................. $ (4,776) $ (9,979) $(6,967) $(25,131) $(6,898)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Gain on sale of contract
rights (note 3)........ (7,710) -- -- -- --
Gain on sale of
telecommunications
service agreements
(note 4)............... -- -- (6,126) -- --
Depreciation and
amortization........... 3,962 4,049 16,245 9,994 2,364
Deferred income tax
(benefit) expense (note
12).................... (2,497) 475 (1,123) (2,839) 6,920
Changes in operating
assets and liabilities:
Receivables--accounts
and notes, net....... 19,522 3,828 (25,680) (21,379) 910
Costs and estimated
earnings in excess of
billings............. (4,198) 2,133 19,138 (21,650) (2,210)
Accounts payable and
accrued expenses..... 33,632 (5,733) 25,381 4,339 5,795
Payable to related
parties.............. -- 403 (2,983) 1,263 1,560
Billings in excess of
costs and estimated
earnings............. (4,736) 4,034 5,034 -- (831)
Other changes......... 160 (395) 9,605 (1,232) (4,304)
--------- --------- ------- -------- -------
Net cash provided by
(used in) operating
activities......... 33,359 (1,185) 32,524 (56,635) 3,306
--------- --------- ------- -------- -------
Cash flows from investing
activities:
Proceeds from sale of
contract rights
(note 3)................. 7,000 -- -- -- --
Proceeds from sale of
telecommunications
service agreements....... -- -- 4,500 -- --
Expenditures for property
and equipment............ (63,922) (11,606) (57,122) (46,313) (40,926)
Cash paid for
acquisitions, net of cash
acquired................. -- -- -- (12,545) --
Investments in and
advances to
telecommunications
companies, net........... -- -- -- -- (786)
--------- --------- ------- -------- -------
Net cash used in
investing
activities......... (56,922) (11,606) (52,622) (58,858) (41,712)
--------- --------- ------- -------- -------
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- --------------------------
1997 1996 1996 1995 1994
---------- --------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from financing
activities:
Borrowings of long-term
debt..................... $ 270,000 $ 4,058 $ 65,000 $62,606 $25,401
Repayments of long-term
debt..................... (93,277) (10,504) (21,322) (2,331) (173)
Debt issuance costs....... (8,210) (36) (112) (591) (190)
Advances from Parent, net
of repayments............ 8,814 22,386 (19,069) 26,256 (10,174)
Contribution from Parent.. -- -- -- 28,000 20,900
Expenses incurred by
Parent on Company's
behalf (note 13)......... -- -- 1,022 -- --
Repurchase of common stock
warrants................. -- -- -- -- (1,500)
---------- -------- -------- ------- -------
Net cash provided by
financing
activities......... 177,327 15,904 25,519 113,940 34,264
---------- -------- -------- ------- -------
Net increase
(decrease) in cash
and cash
equivalents........ 153,764 3,113 5,421 (1,553) (4,142)
Cash and cash equivalents,
beginning of period........ 6,905 1,484 1,484 3,037 7,179
---------- -------- -------- ------- -------
Cash and cash equivalents,
end of period.............. $ 160,669 $ 4,597 $ 6,905 $ 1,484 $ 3,037
========== ======== ======== ======= =======
Supplemental disclosure of
cash flow information:
Cash paid for interest,
net...................... $ 3,056 $ 2,320 $ 8,825 $ 3,972 $ 128
========== ======== ======== ======= =======
Cash paid for taxes, other
than Parent.............. $ 68 $ 21 $ 160 $ 725 $ 2,232
========== ======== ======== ======= =======
Supplemental disclosure of
significant non-cash
investing and financing
activities:
Capital lease obligation.. $ -- $ 415 $ 720 $ 2,419 $ --
========== ======== ======== ======= =======
Accrued capital
expenditures............. $ 15,000 $ -- $ 28,000 $ -- $ --
========== ======== ======== ======= =======
Reduction in additional
paid-in capital
attributable to effect of
cancellation of income
tax benefit receivable
from Parent.............. $ -- $ -- $ 11,088 $ -- $ --
========== ======== ======== ======= =======
Reduction in additional
paid-in capital
attributable to effect of
the tax allocation
agreement with Parent.... $ -- $ -- $ -- $ 975 $ --
========== ======== ======== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-7
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1996, 1995 AND 1994
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) General and Business

Qwest Communications International Inc. (the Company) is wholly-owned by
Anschutz Company (the Parent). The Company is the ultimate holding company for
the operations of Qwest Communications Corporation and subsidiaries (Qwest)
through a merger in 1996 with another wholly-owned subsidiary of the Parent.
The merger was accounted for as a business combination of entities under
common control using carryover basis.

The Company is a developer and operator of telecommunications networks and
facilities and operates in a single business segment, the telecommunications
industry. It provides the following services within that industry:

. Telecommunications Services--the Company provides dedicated line and
switched services to interexchange carriers and competitive access
providers (Carrier Services) and long distance voice, data and video
services to businesses and consumers (Commercial Services).

. Network Construction Services--the Company installs fiber optic
communications systems for interexchange carriers, local telephone
companies, cable television companies, competitive access providers and
other communication entities, as well as for its own use.

Qwest's principal direct and indirect subsidiaries include Qwest
Transmission Inc. (QTI), Qwest Properties Inc. (QPI) and SP Services de Mexico
S.A. de C.V. (SP Mexico). QTI owns and operates a digital microwave
transmission network throughout the eastern and midwestern United States. QPI
is a lessor of a telecommunications switching facility in Dallas, Texas. SP
Mexico holds the rights assigned to it under construction easement agreements
in Mexico (as described in note (14)--Mexico Easement Agreement).

The accompanying consolidated financial statements include the accounts of
the Company and all majority-owned subsidiaries. Intercompany balances and
transactions have been eliminated in consolidation.

(b) Telecommunications Services Revenue

Revenue from telecommunications services is recognized monthly as the
services are provided. Amounts billed in advance of the service month are
recorded as deferred revenue.

The Company accounts for long-term construction contracts relating to the
development of telecommunications networks using the percentage of completion
method. Under the percentage of completion method, progress is generally
measured on performance milestones relating to the contract where such
milestones fairly reflect progress toward contract completion.

Network construction costs include all direct material and labor costs and
those indirect costs related to contract performance. General and
administrative costs are charged to expense as incurred. When necessary, the
estimated loss on an uncompleted contract is expensed in the period in which
it is identified. Revisions to estimated profits on contracts are recognized
in the period they become known.

F-8
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

(d) Cash and Cash Equivalents

The Company classifies cash on hand and deposits in banks, including money
market accounts, and any other investments with an original maturity of three
months or less that the Company may hold from time to time, as cash and cash
equivalents.

(e) Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the useful lives of the assets, commencing when
they are available for service. Leasehold improvements are amortized over the
lesser of the useful lives of the assets or the lease term. Expenditures for
maintenance and repairs are expensed as incurred. Network construction costs,
including interest during construction, are capitalized. Interest capitalized
in the three months ended March 31, 1997 and 1996, and in the years ended
December 31, 1996, 1995 and 1994 was approximately $1,712,000, $530,000,
$2,365,000, $1,856,000 and $285,000, respectively.

The useful lives of property and equipment is as follows:

<TABLE>
<S> <C>
Facility and improvements leasehold............. 20-25 years or lease term
Communications and construction equipment....... 3-10 years
Fiber and conduit systems....................... 15-25 years
Office equipment and furniture.................. 3-7 years
Capital leases.................................. lease term
</TABLE>

While constructing network systems for customers, the Company may install
additional conduit for its own use. This additional conduit is capitalized at
the incremental cost of construction. Costs of the initial conduit, fiber and
facilities are allocated to the customer and the Company based upon the number
of fibers retained by the Company relative to the total fibers installed, or
square footage in the case of facilities.

(f) Impairment of Long-Lived Assets

Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
(SFAS 121) requires that long-lived assets be reviewed for impairment when
events or changes in circumstances indicate that the carrying value of such
assets may not be recoverable. This review consists of a comparison of the
carrying value of the asset with the asset's expected future undiscounted cash
flows without interest costs. Estimates of expected future cash flows are to
represent management's best estimate based on reasonable and supportable
assumptions and projections. If the expected future cash flow exceeds the
carrying value of the asset, no impairment is recognized. If the carrying
value of the asset exceeds the expected future cash flows, an impairment
exists and is measured by the excess of the carrying value over the fair value
of the asset. Any impairment provisions recognized in accordance with SFAS 121
are permanent and may not be restored in the future. No impairment expense was
recognized in the three months ended March 31, 1997, or in the years ended
December 31, 1996 and 1995.

(g) Income Taxes

The Company is included in the consolidated income tax return of the Parent.
The Company uses the asset and liability method of accounting for income taxes
whereby deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial

F-9
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Income
taxes have been computed by applying the asset and liability method as if the
Company were a separate taxpayer.

(h) Intangible and Other Long-Term Assets Amortization

Intangible and other long-term assets include debt issuance costs, deferred
compensation, goodwill and acquired intangibles such as customer contracts and
non-compete covenants. Such costs are amortized on a straight-line basis over
a period ranging from three to fifteen years.

(i) Loss Per Share

The loss per share for the three months ended March 31, 1997 and 1996, and
for the years ended December 31, 1996, 1995 and 1994, was computed by dividing
net loss by the weighted average number of common shares outstanding during
such periods. Common stock equivalent shares from warrants and common stock
issuable for Growth Shares are excluded from the computation as their effect
is antidilutive, except that, pursuant to Securities and Exchange Commission
Staff Accounting Bulletin Number 83, Earnings per Share Computations in an
Initial Public Offering, 1,658,000 common shares issuable for Growth Shares
granted during the 12-month period prior to the Company's initial public
offering at prices below the anticipated public offering price were included
in the calculation as if they were outstanding for all periods presented, up
to the close of the initial public offering.

(j) Management Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

The accompanying interim financial statements as of March 31, 1997, and for
the three months ended March 31, 1997 and 1996 are unaudited but, in the
opinion of management, reflect all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the results of such periods.
The results of operations for any interim period are not necessarily
indicative of results for the full year.

(k) Fair Value of Financial Instruments

The carrying amounts of cash, cash equivalents, accounts receivable,
accounts payable and accrued expenses approximate fair value due to the short-
term maturities of these assets and liabilities. The carrying amounts of notes
and other receivables approximate fair value due to the relatively short
period of time between the origination of these instruments and their expected
realization. The carrying amounts of long-term debt approximate its fair value
since the interest rates on substantially all of the debt are variable and
reset periodically.

(l) Reclassification

Certain prior year amounts have been reclassified to conform with 1996
presentation.

F-10
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

(2) RELOCATION AND RESTRUCTURING

Relocation and restructuring costs of approximately $1,599,000 were
recognized in 1996 and relate primarily to costs incurred in connection with
the restructuring of the direct sales group. Such costs were substantially
paid in 1996 and are included in selling, general and administrative expenses
in the consolidated financial statements. Relocation and restructuring costs
of approximately $1,955,000 in 1994 relate primarily to costs incurred to
consolidate the Company's operations in Denver, Colorado and are included in
selling, general and administrative expenses.

(3) GAIN ON SALE OF CONTRACT RIGHTS

On March 10, 1997, the Company entered into an agreement (the Termination
Agreement) with an unrelated third party (the Purchaser) to terminate certain
equipment purchase and tele-communications capacity rights and options of the
Company exercisable against the Purchaser, for $9,000,000 (the Termination
Agreement Consideration). As of March 31, 1997, the Company has received
$7,000,000 of the Termination Agreement Consideration in cash. The remaining
consideration is payable in cash to the Company upon delivery of certain
telecommunications capacity (Capacity Obligation) to the Purchaser.

As a result of the Termination Agreement, the Company is no longer required
to relocate certain terminal facilities. Accordingly, the Company has reduced
its liability for such costs by approximately $710,000 and has included the
adjustment in gain on sale of contract rights.

As of May 12, 1997, the Company has satisfied its Capacity Obligation and
has received the remaining $2,000,000 of cash consideration due under the
Termination Agreement.

(4) GAIN ON SALE OF TELECOMMUNICATIONS SERVICE AGREEMENTS

On July 1, 1996, the Company sold its right, title and interest in certain
telecommunications service agreements to an unrelated third party (the Buyer)
for $5,500,000. As of December 31, 1996, the Company has received $4,500,000
of the purchase price in cash. As a result of the sale, the Company is no
longer required to incur certain costs related to providing service under the
agreements. Accordingly, in 1996 the Company has reduced its liability for
such costs by approximately $3,899,000 and has included the adjustment in gain
on sale of telecommunications service agreements. Also included in the gain on
sale of telecommunications service agreements is the carrying value of the
related customer contracts sold of approximately $1,714,000 and approximately
$559,000 of other costs incurred as a result of the sale.

During the transition of the service agreements to the Buyer, the Company
has incurred certain facilities costs on behalf of the Buyer, which are
reimbursable to the Company. As of March 31, 1997 and December 31, 1996,
approximately $1,888,000 and $1,988,000, respectively, is due to the Company
for such costs and is included in accounts receivable in the consolidated
financial statements (as described in note (7)--Accounts Receivable). On March
31, 1997, the arrangement relating to transition services expired and has not
yet been renegotiated. A dispute has arisen with respect to reimbursement of
these costs and, as a result, the Company has made a provision of $2,000,000
in the three months ended March 31, 1997.

(5) ACQUISITIONS

On January 31, 1995, the Company purchased all of the outstanding stock of
QTI and Subsidiaries (formerly Qwest Communications, Inc.) for $18,770,000.
The purchase was initially

F-11
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)
financed with an advance from the Parent. The Company repaid a substantial
portion of this advance with the proceeds from two term notes issued in July
1995 (as described in note (11)--Long-Term Debt). The purchase price was
allocated as follows (in thousands):

<TABLE>
<S> <C>
Working capital.................................................. $ 7,744
Property and equipment........................................... 11,012
Other............................................................ 14
-------
$18,770
=======
</TABLE>

The accompanying consolidated statements of operations include the operating
results of QTI since the effective date of the acquisition. The pro forma
effect of the acquisition was immaterial in 1995. The following pro forma
operating results of the Company and QTI for the year ended December 31, 1994
has been prepared assuming the acquisition had been consummated as of January
1, 1994.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1994
---------------------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNT)
<S> <C>
Revenue............................................. $84,865
Net loss............................................ $ 6,643
Loss per share...................................... $ .08
</TABLE>

The pro forma financial information is not necessarily indicative of the
operating results that would have occurred had the acquisition been
consummated as of January 1, 1994, nor is it necessarily indicative of future
operating results.

In January 1995, the Company also purchased certain assets from Fiber
Systems Inc. for $1,750,000.

(6) NETWORK CONSTRUCTION SERVICES REVENUE AND EXPENSES

Costs and billings on uncompleted contracts included in the accompanying
consolidated financial statements are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
MARCH 31, -----------------
1997 1996 1995
----------- -------- -------
(UNAUDITED)
<S> <C> <C> <C>
Costs incurred on uncompleted contracts........ $119,105 $ 82,840 $23,339
Estimated earnings............................. 64,627 48,853 10,610
-------- -------- -------
183,732 131,693 33,949
Less: billings to date......................... 174,843 131,738 9,822
-------- -------- -------
$ 8,889 $ (45) $24,127
-------- -------- -------
Included in the accompanying balance sheets un-
der the following captions:
Costs and estimated earnings in excess of
billings.................................... $ 9,187 $ 4,989 $24,127
Billings in excess of costs and estimated
earnings.................................... (298) (5,034) --
-------- -------- -------
$ 8,889 $ (45) $24,127
======== ======== =======
Revenue the Company expects to realize for work
to be performed on the above uncompleted con-
tracts........................................ $382,525 $328,688 $ 6,692
======== ======== =======
</TABLE>

F-12
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

In 1996, the Company entered into agreements with unrelated third-parties
whereby the Company will provide indefeasible rights of use (IRUs) in multiple
fibers along base routes for a minimum purchase price of approximately
$457,000,000. Under the agreements, the third-parties are entitled to require
the Company to provide IRUs along optional routes, as defined, for an
additional $65,000,000. One of the parties has the option to require the
Company to double the number of fibers along the base route for additional
consideration. These options, when combined with certain options of the
Company, result in a maximum purchase price of approximately $888,000,000. One
contract provides that in the event of delay or non-delivery of segments, the
payments may be reduced or penalties of varying amounts may be due. The
Company obtained construction performance bonds totaling $175,000,000 which
have been guaranteed by the Parent. As a result of activity on these
contracts, the Company has recorded approximately $49,000,000 and $121,000,000
of network construction service revenue in the three months ended March 31,
1997, and in the year ended December 31, 1996, respectively. Earnings relating
to these contracts are estimated using allocations of the total cost of the
Company's network construction project (as described in note (14)--Commitments
and Contingencies).

In April 1997, certain of the options described in the previous paragraph
were exercised. In April 1997, the option to double the number of fibers along
the base route expired. In May 1997, a third customer entered into a contract
with the Company to purchase such additional fibers. These events contributed
to an increase in the purchase price to approximately $980,000,000.

(7) ACCOUNTS RECEIVABLE

Accounts receivable consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
MARCH 31, ----------------
1997 1996 1995
----------- ------- -------
(UNAUDITED)
<S> <C> <C> <C>
Carrier services............................... $10,994 $ 9,978 $12,634
Commercial services............................ 6,380 5,736 3,595
Network construction services.................. 5,865 13,751 111
Transition costs (note 4)...................... 1,888 1,988 --
Interest receivable (note 8)................... 174 1,289 1,088
Other.......................................... -- 175 64
------- ------- -------
25,301 32,917 17,492
Less allowance for doubtful accounts........... (4,683) (3,669) (2,621)
------- ------- -------
Accounts receivable, net....................... $20,618 $29,248 $14,871
======= ======= =======
</TABLE>

(8) NOTES AND OTHER RECEIVABLES

On November 16, 1994, a third party entered into a $45,000,000 agreement to
purchase a single conduit and fund a portion of the total cost of a multiple
conduit system to be constructed by the Company. Three conduits were
constructed for the Company's own use. Contract revenues from this agreement
were approximately $3,059,000, $29,664,000, and $1,959,000 in the years ended
December 31, 1996, 1995 and 1994, respectively. The Company recognized the
remaining proceeds as cost recoveries in 1996 and 1995 by reducing its cost
basis in the Company-owned conduits. The Company may be required to pay up to
$13,000,000 to the third party in the event of the sale of the Company-owned
conduits.

F-13
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

Payment for installation of each route became due upon completion of the
route and was payable in three equal installments. Prior to completion,
interest was payable on costs incurred for route construction at 7.65%.

In November 1995, the Company completed construction of the first route. The
Company received cash payments of approximately $4,082,000 representing one-
third of the route's contract price, including cost recoveries, and $546,000
representing interest earned during construction. In addition, the Company
received a promissory note for approximately $8,163,000, representing the
remaining two-thirds of the contract price, including cost recoveries. The
second installment of approximately $4,082,000 was received in November 1996.
The remaining note balance is due on the second anniversary of the note's
issuance and accrues interest at 6.59%.

In February 1996, the Company completed construction of the second route.
The Company received cash payments of approximately $10,918,000 representing
one-third of the route's contract price, including cost recoveries, and
$1,328,000 representing interest earned during construction. In addition, the
Company received two promissory notes for approximately $19,650,000 and
$2,187,000, representing the remaining two-thirds of the contract price for
that route, including cost recoveries. The notes are due in two equal annual
installments on the first and second anniversaries of the notes' issuance, and
accrue interest at 7.31% and 6.59% during the first and second years,
respectively, of the notes' term. The first installment of approximately
$10,918,000 was received in February 1997.

(9) PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
MARCH 31, ------------------
1997 1996 1995
----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Land....................................... $ 538 $ 506 $ 420
Facility and leasehold improvements........ 8,009 7,951 5,040
Communications and construction equipment.. 54,024 52,076 41,104
Fiber and conduit systems.................. 42,167 42,446 42,414
Office equipment and furniture............. 6,402 6,360 5,925
Network construction and other assets held
under capital leases (note 11)............ 3,197 3,197 2,419
Work in progress........................... 146,819 99,915 29,618
-------- -------- --------
261,156 212,451 126,940
Less accumulated depreciation and amortiza-
tion...................................... (29,928) (25,916) (12,192)
-------- -------- --------
Property and equipment, net................ $231,228 $186,535 $114,748
======== ======== ========
</TABLE>

F-14
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

(10) ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consists of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
MARCH 31, ---------------
1997 1996 1995
----------- ------- -------
(UNAUDITED)
<S> <C> <C> <C>
Accounts payable................................ $32,742 $44,766 $13,587
Construction accounting accrual................. 37,585 18,071 --
Growth-share expenses (note 15)................. 3,000 3,810 --
Capacity service expenses....................... 3,164 3,658 3,719
Property, sales and other taxes................. 11,744 3,793 2,395
Contract obligations............................ 109 855 2,381
Other........................................... 10,417 5,176 4,666
------- ------- -------
Accounts payable and accrued expenses........... $98,761 $80,129 $26,748
======= ======= =======
</TABLE>

Accounts payable as of March 31, 1997 and December 31, 1996 includes
approximately $9,000,000 and $37,000,000, respectively, payable for fiber
purchases under the materials purchase agreement (as described in note (14)--
Network Construction Project).

(11) LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
MARCH 31, ------------------
1997 1996 1995
----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Senior notes................................. $250,000 $ -- $ --
Revolving credit facility.................... -- 60,000 --
Customer contract credit facility............ 15,000 25,918 40,418
Network credit facility...................... 25,980 27,077 29,273
Equipment loans.............................. 9,260 9,820 6,765
Term notes................................... 8,916 9,416 11,100
Capital lease obligation..................... 1,808 2,010 2,187
Other........................................ 220 220 320
-------- -------- --------
Total debt.................................. 311,184 134,461 90,063
Less current portion......................... (24,859) (25,193) (21,270)
-------- -------- --------
Long-term debt............................... $286,325 $109,268 $ 68,793
======== ======== ========
</TABLE>

On March 31, 1997, the Company issued 10 7/8% Senior Notes (the Senior
Notes) due 2007 having an aggregate principal amount of $250,000,000. The net
proceeds of the Senior Notes was approximately $242,000,000, after deducting
offering costs which are included in intangible and other long-term assets. Of
the net proceeds, approximately $80,000,000 was used in March 1997 to repay
the principal outstanding under the $100,000,000 revolving credit facility
(described below). The Company expects to use the remaining net proceeds to
repay other existing indebtedness of the Company and its subsidiaries, other
than advances from the Parent and the customer contract credit facility, and
to fund a portion of capital expenditures required to complete construction of
segments of the Network currently under construction (as described in note
(14)--Network Construction Project).

F-15
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

Interest on the Senior Notes is payable semi-annually in arrears on April 1
and October 1 of each year, commencing October 1, 1997. The Senior Notes are
subject to redemption at the option of the Company, in whole or in part, at
any time on or after April 1, 2002, at specified redemption prices. In
addition, prior to April 1, 2000, the Company may use the net cash proceeds
from certain specified equity transactions to redeem up to 35% of the Senior
Notes at specified redemption prices.

In connection with the sale of the Senior Notes, the Company agreed to make
an offer to exchange new notes, registered under the Securities Act of 1933
(the "Act") and with terms identical in all material respects to the Senior
Notes (the "New Notes"), for the Senior Notes or, alternatively, to file a
shelf registration statement under the Act with respect to the Senior Notes.
If the registration statement for the exchange offer or the shelf registration
statement, as applicable, are not filed or declared effective within specified
time periods or, after being declared effective, cease to be effective or
usable for resale of the Senior Notes during specified time periods (each a
"Registration Default"), additional interest will accrue at a rate per annum
equal to 0.50% of the principal amount of the Senior Notes during the 90-day
period immediately following the occurrence of a Registration Default and
increasing in increments of 0.25% per annum up to a maximum of 2.0% per annum,
at the end of each subsequent 90-day period until the Registration Default is
cured.

In April 1996, the Company entered into a $100,000,000 revolving credit
facility agreement (as amended in September 1996) (the Facility), the proceeds
of which will be used for working capital purposes, capital expenditures and
the issuance of letters of credit. The Facility provides for an initial
$100,000,000 three-year revolving loan commitment (the Revolver) which expires
on April 2, 1999. At that time, the outstanding loan amount converts to a two-
year term credit loan which matures on April 2, 2001. Quarterly mandatory
payments commence on June 30, 1999, and include equal quarterly principal
reductions, based on the amount of the outstanding loan at the date of
conversion. Letters of credit issued under the Facility are limited to a total
outstanding of $10,000,000. There were no letters of credit outstanding at
December 31, 1996 or March 31, 1997.

Interest on amounts borrowed under the Revolver is payable approximately
monthly at the bank's prime rate or other interest rate option plus an
applicable margin. The weighted average interest rate on amounts borrowed
under the Revolver was approximately 6.5% at December 31, 1996. In addition, a
commitment fee is payable on the unused portion of the Revolver. The Facility
is secured by pledges of certain stock owned by the Parent. The Facility
agreement contains certain affirmative and negative covenants. The Company can
make prepayments of outstanding principal without penalty. In March 1997, the
outstanding principal under the Revolver was repaid with a portion of the net
proceeds from the issuance of the Senior Notes.

In February 1997, the Company entered into a separate additional $50,000,000
revolving credit facility agreement which will be used primarily for working
capital purposes. This facility is secured by pledges of certain stock owned
by an affiliate of the Parent. This facility contains, except for terms of
repayment, substantially identical terms as the $100,000,000 credit facility
described above. No amounts are outstanding under this facility as of March
31, 1997.

In April 1995, the Company entered into a $45,000,000 customer contract
credit facility agreement to finance certain construction projects undertaken
at that time. The facility converted to a term loan upon completion of the
construction projects in 1996 and 1995 and is now secured by notes receivable
issued in connection with these construction projects (as described in note
(8)--Notes and Other

F-16
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)
Receivables). The facility bears interest at the Company's option at either
(a) the higher of (i) the bank's base rate of interest, or (ii) the Federal
Funds Rate plus 1/2%; or (b) LIBOR plus 9/16%. The outstanding balance at
December 31, 1996 is due in installments on the anniversary dates of the
completion of the projects, through February 1998.

In June 1994, the Company entered into a $27,600,000 network credit facility
agreement, secured by certain of the Company's fiber systems which bears
interest at 4.65% above the 90-day High Grade Commercial Paper rate. All
interest accrued on borrowings under this facility from June 1994 through June
1995 was added to the principal balance of the facility. Interest added as
additional principal was approximately $1,388,000 and $285,000 for 1995 and
1994, respectively. From July 1995 to June 1996, interest only payments were
paid on the loan balance. Monthly mandatory principal and interest payments
commenced on July 31, 1996 and increase from 1.25% to 2.08% of the initial
loan balance over the term of the loan, which is payable in full on July 31,
2001. Prepayments are permitted without penalty. The credit facility agreement
contains financial covenants for Qwest regarding the maintenance of certain
key ratios. This facility was repaid in April 1997.

In August 1995, the Company executed two equipment loans for approximately
$5,000,000 in aggregate, which bear interest at LIBOR plus 2.65%, and LIBOR
plus 2.55%, respectively, and are secured by certain equipment. Quarterly
mandatory payments commenced on December 1, 1995, which include $250,000
principal reductions and accrued interest, with the final installment due on
September 1, 2000. These loans were repaid in April 1997.

In 1996, the Company executed three equipment loans aggregating
approximately $5,000,000. The notes bear interest ranging from 8.86% to 10.15%
per annum, and are secured by certain equipment. Monthly mandatory payments
include monthly principal reductions ranging from approximately $20,000 to
$54,000 plus accrued interest, with the final installment due August 1, 2001.
These loans were repaid in May 1997.

In December 1992, the Company executed an equipment loan for approximately
$2,600,000. The loan bears interest at 4.65% above the 90-day High Grade
Commercial Paper rate and is secured by certain communications equipment.
Monthly mandatory payments include approximately $29,000 of principal
reduction and accrued interest, with the final installment due October 2001.
The loan agreement contains financial covenants for Qwest regarding the
maintenance of certain key ratios. This loan was repaid in April 1997.

In July 1995, the Company issued two term notes totaling $12,000,000, which
are secured by all current and future assets of QTI and used the proceeds to
repay a portion of the advance from the Parent used to purchase QTI (as
described in note (5)--Acquisitions). The notes bear interest at LIBOR plus
3%, which is to be reduced as the Company meets certain covenants. Quarterly
mandatory principal and interest payments commenced on September 30, 1995 and
increase from 3.75% to 5.4% of the initial loan balance over the term of the
loan, which is payable in full on September 30, 2000. The Company may prepay
the notes without penalty. Mandatory prepayments are required within 120 days
of each fiscal year end in the amount of 50% of the excess cash flow, as
defined, in excess of $500,000, if QTI's leverage ratio is in excess of 1.75
to 1. The note agreements contain financial covenants for QTI regarding the
maintenance of certain leverage and fixed charge coverage ratios. These notes
were repaid in April 1997.

Under the terms of certain loan agreements described above, at March 31,
1997 and December 31, 1996 all net assets of the Company's subsidiaries are
restricted.

F-17
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

The Company leases certain network construction equipment under capital
lease agreements. The amortization charge applicable to capital leases is
included in depreciation expense. Future minimum payments under capital lease
obligations is included in contractual maturities of long-term debt summarized
below.

Contractual maturities of long-term debt as of March 31, 1997 and December
31, 1996 are as follows (in thousands):

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
----------- ------------
(UNAUDITED)
<S> <C> <C>
Year ended December 31:
1997.............................................. $ 22,925 $ 25,193
1998.............................................. 10,826 21,533
1999.............................................. 12,189 34,458
2000.............................................. 11,180 41,430
2001.............................................. 4,064 11,847
Thereafter........................................ 250,000 --
-------- --------
$311,184 $134,461
======== ========
</TABLE>

In May 1997, the Company entered into a $90,000,000 credit agreement (the
Credit Agreement) with an unrelated third-party supplier (the Supplier) of
transmission electronics equipment to fund a portion of certain capital
expenditures required to equip the Network currently under construction (as
described in note (14)--Network Construction Project). Under the Credit
Agreement, the Company may borrow to purchase equipment and related
engineering and installation services from the Supplier up to 75% of the
purchase price of such equipment and services, with the purchased equipment
and related items serving as collateral for the loans. The Company is
committed to purchase from the Supplier a minimum of $100,000,000 of such
equipment and services under a separate procurement agreement which was
executed in May 1997. Principal amounts outstanding under the Credit Agreement
will be payable in quarterly installments commencing on June 30, 2000, with
repayment in full due and payable on May 6, 2004. Borrowings will bear
interest at the Company's option at either: (i) a floating base rate offered
by a designated reference bank plus an applicable margin; or (ii) LIBOR plus
an applicable margin.

(12) INCOME TAXES

Income tax benefit for years ended December 31, 1996, 1995 and 1994 is as
follows (in thousands):

<TABLE>
<CAPTION>
1996 1995 1994
------ ------- -------
<S> <C> <C> <C>
Current:
Federal........................................... $1,673 $10,497 $ 9,575
State............................................. 438 -- 1,132
------ ------- -------
Total current income tax benefit................ 2,111 10,497 10,707
------ ------- -------
Deferred:
Federal........................................... 1,123 2,839 (6,720)
State............................................. -- -- (200)
------ ------- -------
Total deferred income tax benefit (expense)..... 1,123 2,839 (6,920)
------ ------- -------
Total income tax benefit........................ $3,234 $13,336 $ 3,787
====== ======= =======
</TABLE>

F-18
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

Total income tax benefit differed from the amounts computed by applying the
federal statutory income tax rate (35%) to loss before income tax benefit as a
result of the following items for the years ended December 31, 1996, 1995 and
1994 (amounts in thousands):

<TABLE>
<CAPTION>
1996 1995 1994
------ ------- ------
<S> <C> <C> <C>
Expected income tax benefit....................... $3,570 $13,463 $3,740
State income taxes, net of federal income tax ben-
efit............................................. 279 -- 281
Goodwill and other intangible asset amortization.. (568) (56) (67)
Other, net........................................ (47) (71) (167)
------ ------- ------
Total income tax benefit........................ $3,234 $13,336 $3,787
====== ======= ======
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities at December 31, 1996 and
1995 are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1995
------- -------
<S> <C> <C>
Current deferred tax assets (liabilities):
Allowance for doubtful accounts........................ $ 1,283 $ 917
Accrued liabilities.................................... 7,578 3,475
------- -------
8,861 4,392
Network construction contracts......................... (2,560) --
------- -------
$ 6,301 $ 4,392
======= =======
Long-term deferred tax assets (liabilities):
Deferred compensation.................................. $ 3,252 $ --
Depreciation........................................... 961 136
Accrued liabilities.................................... 26 234
------- -------
4,239 370
Intangible assets, principally due to differences in
basis and amortization................................ (112) (919)
Property and equipment................................. (5,835) (373)
------- -------
(5,947) (1,292)
------- -------
$(1,708) $ (922)
======= =======
</TABLE>

The Company has analyzed the sources and expected reversal periods of its
deferred tax assets. The Company believes that the tax benefits attributable
to deductible temporary differences will be realized by recognition of future
taxable amounts. Accordingly, the Company believes a valuation allowance for
its federal deferred tax assets is not necessary.

The Company is included in the consolidated federal income tax return of its
Parent, which has a July 31 year-end for income tax purposes. A tax allocation
agreement between the Company and its Parent was implemented effective
November 4, 1993 which encompasses U.S. federal tax consequences. The Company
is responsible to its Parent for its share of current consolidated income tax
liabilities. The Parent is responsible to the Company to the extent that the
Company's income tax

F-19
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)
attributes are utilized by the Parent to reduce its consolidated income tax
liabilities, subject to certain limitations on net operating loss and credit
carryforwards. At December 31, 1996, the income tax benefit receivable from
Parent of approximately $11,088,000 was canceled which resulted in a reduction
of additional paid-in capital.

The tax allocation agreement has been amended effective as of January 1,
1997 (the Effective Date). Under the amended agreement, the Company would be
responsible to the Parent to the extent of income taxes for which the Company
and its subsidiaries would have been liable if the Company had filed a
consolidated federal income tax return, giving effect to any loss or credit
carryover belonging to the Company and its subsidiaries from periods after the
Effective Date. The Parent would be responsible to the Company to the extent
an unused loss or credit can be carried back to an earlier taxable period
after the Effective Date.

In certain cases, differences may arise between amounts reported in the
financial statements under generally accepted accounting principles and the
amounts actually payable or receivable under the tax allocation agreement.
Those differences are generally reported as adjustments to capital, as in-
substance dividends. The Company recorded $975,000 in 1995 as a reduction to
additional paid-in capital reflecting the difference between the current
income tax benefit calculable as if the Company filed a separate income tax
return and the current income tax benefit calculable under the tax allocation
agreement.

(13) RELATED PARTY TRANSACTIONS

(a) Transactions with Parent

Advances from Parent at March 31, 1997, and at December 31, 1996 and 1995,
which are non-interest bearing, include costs charged to the Company by the
Parent and advances received from the Parent to fund operations, net of
repayments, and are payable upon demand after March 31, 1997.

The Parent incurs certain costs on the Company's behalf, including primarily
insurance and corporate transportation services, and allocates such costs to
the Company based on actual usage. The cost to the Company for such services
was approximately $792,000, $495,000, $2,100,000 and $2,500,000 in the three
months ended March 31, 1997 and 1996, and in the years ended December 31, 1996
and 1995, respectively, and was not material in 1994.

Accounts receivable from (payable to) the Parent are recognized to reflect
income tax benefits receivable (income taxes payable) pursuant to the tax
allocation agreement between the Company and the Parent (as described in note
(12)--Income Taxes).

The Company has agreed to indemnify the Parent and its subsidiaries against
any costs or losses incurred by any of them as a result of their providing
credit support to the Company (in the form of collateral pledges, guarantees,
bonds or otherwise).

(b) Transactions with Other Related Parties

The Parent owned approximately 25% of Southern Pacific Rail Corporation and
its subsidiaries (SPRC) at December 31, 1995. In September 1996, SPRC was
acquired by Union Pacific Corporation. As a result of this transaction, the
Parent owns approximately 5% of Union Pacific Corporation, and SPRC ceased to
be a related party.

F-20
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

The Company provides telecommunication services to SPRC and charged SPRC
approximately $1,626,000, $3,625,000 and $3,358,000 in the years ended
December 31, 1996, 1995 and 1994, respectively, for these services. Amounts
due to the Company for telecommunication services totaled approximately
$411,000 at December 31, 1995. Services under these agreements can be
terminated with notice.

In certain instances the Company purchases and has made future commitments
(as described in note (14)--Commitments and Contingencies) relating to right-
of-way easements from SPRC and utilizes specialized SPRC personnel and
equipment for its construction projects. SPRC charged the Company
approximately $3,548,000, $2,179,000 and $870,000 for these services in the
years ended December 31, 1996, 1995 and 1994, respectively. Amounts due to
SPRC for these activities totaled approximately $3,394,000 at December 31,
1995.

The Company leases its corporate office in Denver, Colorado from an
affiliate of the Parent at prevailing market rates. The cost to the Company
for such lease was approximately $281,000 in the three months ended March 31,
1997 and 1996, and $1,155,000 and $1,047,000 in the years ended December 31,
1996 and 1995, respectively, and was not material in 1994.

On November 11, 1996, the former president and chief executive of the
Company resigned his position. Upon his resignation, the Parent forgave a note
receivable from him in the amount of approximately $1,022,000. This charge was
allocated to the Company in 1996 and is included in selling, general and
administrative expenses and additional paid-in capital in the Company's
consolidated financial statements.

(14) COMMITMENTS AND CONTINGENCIES

(a) Network Construction Project

In 1996, the Company commenced construction of a coast-to-coast fiber optic
telecommunications network (the Network) that is scheduled for completion in
1998. The Company projects its total remaining cost at December 31, 1996 for
completing the construction of the Network will be approximately $765,000,000.
This amount includes the Company's commitment to purchase a minimum quantity
of materials for approximately $257,000,000 in the year ended December 31,
1997, subject to quality and performance specifications. The Company has the
option to extend the materials purchase agreement through December 31, 1999
and may assign some or all of its remaining purchase commitment to a third-
party or cancel the agreement by paying the seller an amount equal to 7% of
any remaining commitment. The Company has contracted to provide a portion of
the fibers in the Network to a third party and has granted an option for
additional fibers in the Network (as described in note (6)--Network
Construction Services Revenue and Expenses).

The Company is pursuing financing to accomplish this construction and
installation of equipment and also contemplates additional sales of Network
fibers and capacity. Management believes that it will be successful in
obtaining the necessary financing and completing the sales that will permit it
to fulfill its contractual commitments. If all such financing were not
obtained or sufficient sales not consummated, the Company could modify its
plans and defer certain portions of the project.

F-21
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

In April 1997, certain options were exercised, and in May 1997 an option to
double the number of fibers along the base route of the Network was
renegotiated and a third customer entered into a contract with the Company to
purchase such additional fibers (as described in note (6)--Network
Construction Services Revenue and Expenses). As a result of these events, the
Company now projects its total remaining cost for completing the Construction
of the Network will be approximately $1,000,000,000. This includes the
Company's remaining commitment to purchase a minimum quantity of materials for
approximately $177,000,000 as of April 30, 1997.

(b) Leases and Telecommunications Service Commitments

The Company leases certain terminal locations and office space under
operating lease agreements and has committed to use certain telecommunications
capacity services. Future minimum payments under noncancelable operating lease
and service commitments as of December 31, 1996 and March 31, 1997 are as
follows (in thousands):

As of December 31, 1996

<TABLE>
<CAPTION>
CAPACITY
SERVICE OPERATING
COMMITMENTS LEASES TOTAL
----------- --------- -------
<S> <C> <C> <C>
Year ended December 31:
1997..................................... $3,250 $ 4,213 $ 7,463
1998..................................... 3,000 3,327 6,327
1999..................................... -- 2,404 2,404
2000..................................... -- 1,410 1,410
2001..................................... -- 556 556
Thereafter............................... -- 828 828
------ ------- -------
Total minimum payments................. $6,250 $12,738 $18,988
====== ======= =======
As of March 31, 1997 (unaudited)

<CAPTION>
CAPACITY
SERVICE OPERATING
COMMITMENTS LEASES TOTAL
----------- --------- -------
<S> <C> <C> <C>
Year ended December 31:
1997..................................... $2,350 $ 2,884 $ 5,234
1998..................................... 3,000 3,316 6,316
1999..................................... -- 2,478 2,478
2000..................................... -- 1,295 1,295
2001..................................... -- 441 441
Thereafter............................... -- 895 895
------ ------- -------
Total minimum payments................. $5,350 $11,309 $16,659
====== ======= =======
</TABLE>

Capacity service expenses are included in telecommunications service costs.
Amounts expensed in the three months ended March 31, 1997 and 1996, and in the
years ended December 31, 1996, 1995 and 1994 were approximately $2,119,000,
$8,947,000, $18,990,000, $19,622,000 and $17,226,000, respectively.

Amounts expensed in the three months ended March 31, 1997 and 1996, and in
the years ended December 31, 1996, 1995 and 1994 related to operating leases
were approximately $1,288,000, $1,109,000, $4,998,000, $4,645,000, and
$3,146,000, respectively.

F-22
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

The Company has Master Easement Agreements (the Original Agreements) with
SPRC and its affiliated railroads which provide for payment of specified
amounts based on miles of conduit used by the Company or sold to third
parties. The Company has the option under the Original Agreements to either
make annual payments for the term of the easement or to make lump sum payments
at a discount. The Company has made annual payments through 1996 and retains
the option to make the discounted lump sum payments in the future.

The Original Agreement was amended effective August 20, 1996 (the Agreement
Amendment). The Agreement Amendment grants the Company the right to install up
to approximately 3,300 miles of new conduit in specified SPRC rail corridor,
through August 9, 2001. The Company is required to construct a minimum of two
conduits on a minimum of 1,200 route miles, as follows: (i) 400 miles on or
before August 9, 1997; (ii) 400 additional miles on or before August 9, 1998;
and (iii) 400 additional miles on or before August 9, 1999. In addition, the
Company is required to provide SPRC with limited communications capacity as
defined, for its own internal use.

The Agreement Amendment requires the Company in some instances, as defined,
to make lump-sum payments on a per-mile basis upon completion of conduit
construction, or within two years of the creation of the related easement
area. In other instances, as defined, the Company is required to make lump sum
payments on a per-mile basis when the related conduit is placed in service.

In addition to those with SPRC, the Company has easement agreements with
other railroads and certain public transportation authorities. The Company's
estimate of amounts payable under all noncancelable easement agreements,
assuming the Company continues to make annual payments pursuant to the
Original Agreement, totals approximately $83,000,000 and $82,000,000 at March
31, 1997 and December 31, 1996, respectively. The Company's estimate of the
amounts payable under all noncancelable easement agreements, assuming the
Company exercises its option to make discounted lump-sum payments pursuant to
the Original and Amended Agreement as of December 31, 1996 and March 31, 1997
are as follows (in thousands):

As of December 31, 1996

<TABLE>
<S> <C>
Year ended December 31:
1997............................................................. $15,048
1998............................................................. 140
1999............................................................. 101
2000............................................................. 610
2001............................................................. 1,194
Thereafter....................................................... 2,170
-------
$19,263
=======

As of March 31, 1997 (unaudited)

Year ended December 31:
1997............................................................. $17,646
1998............................................................. 139
1999............................................................. 101
2000............................................................. 610
2001............................................................. 1,194
Thereafter....................................................... 1,960
-------
$21,650
=======
</TABLE>

F-23
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

In certain limited instances the Company may be obligated to pay costs of
relocating certain conduits owned by third-parties on approximately 500 miles
of railroad rights-of-way. The majority of such commitments expire in February
2001. The Company accrues for such costs as they are identified. As of March
31, 1997, the Company has accrued approximately $2,500,000 for such costs,
which amount is included in accounts payable and accrued expenses in the
consolidated financial statements.

The amounts charged to network construction costs for sub-easements sold and
other right-of-way costs associated with sales to third parties under the
Original and Amended Agreement for the three months ended March 31, 1997 and
1996, and for years ended December 31, 1996, 1995 and 1994 were approximately
$662,000, $1,319,000, $2,633,000, $2,981,000 and $2,696,000, respectively.
Amounts charged to selling, general and administrative expenses for easements
retained by the Company were approximately $726,000 and $789,000 in the three
months ended March 31, 1997 and 1996, respectively, $3,498,000 in year ended
December 31, 1996 and was not material in 1995 and 1994.

(d) Mexico Easement Agreement

In December 1995, the Company entered into an agreement (as amended January
1997) with Ferrocarriles Nacionales de Mexico, granting the Company easements
for the construction of multiple conduit systems along railroad rights-of-way
within Mexico, for consideration of approximately $7,700,000, including
$1,100,000 in value-added taxes. The Company has capitalized total costs,
including rights-of-way, equipment, construction and design costs, relating to
this investment of approximately $13,000,000 as of December 31, 1996.

(e) Executive Employment Agreement

In January 1997, the Company entered into an employment agreement (the
Agreement) with its new president and chief executive officer (the Executive),
effective through the close of business December 31, 2001, unless terminated
earlier by either party. The Agreement provides for annual salary and bonuses
of specific amounts, as well as an approximate $11,300,000 payment (the
Equalization Payment) to the Executive to compensate him for certain benefits
from his former employer that he may lose or forfeit as a result of his
resignation and commencement of employment with the Company. Such payment is
subject to reduction in the event the Executive retains or receives a
substitute payment for any of the benefits he expected to forfeit.

The Equalization Payment is payable in cash in three installments. The first
installment of approximately $7,200,000 was paid in January 1997. The
remaining two installments of approximately $2,050,000 each are payable on
January 1, 1998 and 1999, with accrued interest thereon at the rate of 5% per
annum. The Company is amortizing the cost of the Equalization Payment on a
straight-line basis through December 31, 1999. At March 31, 1997, $3,800,000
of such costs are included in other current assets, and $6,700,000 are
included in intangible and other long-term assets.

Under the Agreement, the Executive is required to repay to the Company a
portion of the Equalization Payment previously paid in the event the Executive
is terminated for cause on or before December 31, 1999.

F-24
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31, 1997
AND 1996 IS UNAUDITED)

(15) GROWTH SHARE PLAN

The Company has a Growth Share Plan (the Plan) for certain employees and
directors of Qwest and certain affiliates. A Growth Share is a unit of value
based on the increase in value of the Company over a specified performance
cycle or other specified measuring period. All Growth Share grants made through
March 31, 1997 have generally been based on a beginning Company value that was
greater than or equal to the fair value of the Company at the grant date. The
total number of Growth Shares is set at 10,000,000 and the maximum number
presently available for grant under the Plan is 850,000. Growth Shares granted
under the Plan vest at the rate of 20% for each full year of service completed
after the grant date subject to risk of forfeiture. Participants receive their
vested portion of the increase in value of the Growth Shares upon a triggering
event, as defined, which includes the end of a Growth Share performance cycle.
Settlement is made in common stock or cash at the Company's option, except that
settlement of Growth Shares granted under the October 1996 Plan is to be made,
after an initial public offering, only in common stock. Certain participants
vest fully upon completion of an initial public offering by the Company.

Compensation under the Growth Share Plan is measured, pursuant to Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, by
the increase in the value of outstanding growth shares at each balance sheet
date. Such compensation is amortized to expense over the vesting period for
each Growth Share award. Certain triggering events, consisting of an initial
public offering for awards made prior to October 1996 and a change in control
of the Company, cause immediate vesting of related Growth Share awards and
result in accelerated expense recognition of all unamortized compensation for
such awards. Had the Company accounted for its stock-based compensation
pursuant to the fair value method in Statement of Financial Accounting
Standards No. 123, Accounting for Stock Based Compensation, the amount of
compensation would not have been materially different from what has been
reflected in the accompanying consolidated financial statements.

The Company has estimated an increase in value of the Growth Shares at
December 31, 1996 due to the signing of an agreement to provide an indefeasible
right of use to a third party (as described in note (6)--Network Construction
Services Revenue and Expenses) and has recorded approximately $13,100,000 of
additional compensation expense in 1996, approximately $9,000,000 of which is
included in other liabilities at December 31, 1996. Included in this 1996
compensation expense is $9,000,000 payable to the former president and chief
executive of the Company as settlement for his Growth Share awards. No expense
was recognized in the accompanying consolidated financial statements for the
years ended December 31, 1995 and 1994, as there were no significant
compensatory elements in those periods.

As of March 31, 1997, the Company has estimated an increase in the value of
Growth Shares, and has recorded approximately $13,100,000 of additional
compensation expense in the three months ended March 31, 1997. Upon completion
of the initial public offering (as described in note (18)--Securities
Offering), certain Growth Shares will vest in full, which will result in
substantial compensation expense under the Growth Share Plan in the second
quarter of 1997. The actual compensation expense accrual is dependent upon the
number of Growth Shares that vest upon completion of the initial public
offering, and the average trading price of the Common Stock over the five
trading day period beginning June 24, 1997. The Company estimates, based on an
assumed average trading price per share of Common Stock of $28.89 (which was
the average for the four trading days beginning June 24, 1997 and ending June
27, 1997), that the additional compensation expense accrual in the second
quarter of 1997 would be up to $71.0 million. In addition, the number of shares
of Common Stock

F-25
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)

issued to holders of Growth Shares in payment therefor would be reduced by
certain elections by them for tax withholdings and cash payments. If the
holders elected the maximum withholdings and payments, up to $32 million of
accrued compensation would be payable in cash by the Company. Compensation
relating to certain nonvested Growth Shares will be amortized as expense over
the remaining approximately four and one-half year vesting period.

The following table summarizes Growth Share grants and Growth Shares
outstanding:

<TABLE>
<CAPTION>
OUTSTANDING GROWTH SHARES
-------------------------
<S> <C>
December 31, 1993..................................... 174,000
1994 grants.......................................... 502,000
--------
December 31, 1994..................................... 676,000
1995 grants.......................................... 11,000
1995 forfeitures..................................... (8,500)
--------
December 31, 1995..................................... 678,500
1996 grants.......................................... 67,500
1996 forfeitures and settlements .................... (470,600)
--------
December 31, 1996..................................... 275,400
1997 grants.......................................... 330,000
--------
March 31, 1997........................................ 605,400
========
</TABLE>

Approximately 110,000 Growth Shares were vested at December 31, 1996 and
March 31, 1997. An additional 127,400 of the Growth Shares outstanding as of
March 31, 1997 would vest upon completion of an initial public offering by the
Company.

As of March 31, 1997, the threshold to be used in determining the increase
in the Company's value, adjusted for contributions, for 275,400 of the Growth
Shares outstanding was approximately $140 million. The threshold to be used
for the remaining 330,000 Growth Shares outstanding as of March 31, 1997 was
approximately $1 billion.

(16) SAVINGS PLAN

The Company sponsors a 401(k) Savings Plan which permits employees to make
contributions to the Savings Plan on a pre-tax salary reduction basis in
accordance with the Internal Revenue Code. All full-time employees are
eligible to participate after one year of service. The Company contributes a
base percentage and matches a portion of the voluntary employee contributions.
The cost of this Savings Plan charged to expenses was approximately $165,000,
$171,000, $683,000, $385,000 and
$283,000 in the three months ended March 31, 1997 and 1996, and in years ended
December 31, 1996, 1995 and 1994, respectively.

(17) SIGNIFICANT CUSTOMERS

During the three months ended March 31, 1997, and years ended December 31,
1996, 1995 and 1994, two or more customers, in aggregate, have accounted for
10% or more of the Company's total revenues in one or more periods, as
follows:

<TABLE>
<CAPTION>
CUSTOMER CUSTOMER CUSTOMER
A B C
-------- -------- --------
<S> <C> <C> <C>
1997........................................... -- 8.8% 59.0%
1996........................................... 4.0% 27.8% 26.3%
1995........................................... 35.4% 6.8% --
1994........................................... 5.9% 18.0% --
</TABLE>

F-26
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF MARCH 31, 1997, AND FOR THETHREE MONTHS ENDED MARCH 31,
1997 AND 1996 IS UNAUDITED)
(18) SECURITIES OFFERING

In April 1997, the Company filed a registration statement with the
Securities and Exchange Commission for an initial public offering of
13,500,000 shares of Common Stock. On May 23, 1997, the Board of Directors
approved a change in the Company's capital stock to authorize 400,000,000
shares of Common Stock, $.01 par value per share, of which shares 10,000,000
are reserved for issuance under the equity incentive plan (described in the
following paragraph), 2,000,000 are reserved for issuance under the Growth
Share Plan (as described in note (15)--Growth Share Plan), and 4,300,000 are
reserved for issuance upon exercise of warrants (as described below), and
25,000,000 shares of Preferred Stock, $.01 par value per share. On May 23,
1997, the Board of Directors declared a stock dividend to the existing
stockholder of 86,490,000 shares of Common Stock, which is payable immediately
prior to the effectiveness of the registration statement. This dividend is
accounted for as a stock split. All shares and per share information included
in the accompanying consolidated financial statements has been adjusted to
give retroactive effect to the change in capitalization.

On May 23, 1997, the Board of Directors and the stockholder of the Company
approved an equity incentive plan. Under this plan, stock options, stock
appreciation rights, restricted stock awards, stock units and other stock
grants may be granted (with respect to up to 10,000,000 shares of Common
Stock) to eligible participants who significantly contribute to the Company's
growth and profitability.

Effective May 23, 1997, the Company sold to an affiliate (the Affiliate) of
the Parent for $2,300,000 in cash, a warrant to acquire 4,300,000 shares of
Common Stock at an exercise price of $28 per share, exercisable on May 23,
2000. The warrant is not transferable. Stock issued upon exercise of the
warrant will be subject to restrictions on sale or transfer for two years
after exercise.

F-27
<PAGE>

GLOSSARY

Access charges............. The fees paid by long distance carriers to LECs
for originating and terminating long distance
calls on the LECs' local networks.

ATM (Asynchronous Transfer
Mode).....................
An information transfer standard that is one of a
general class of packet technologies that relay
traffic by way of an address contained within the
first five bytes of a standard fifty-three-byte-
long packet or cell. The ATM format can be used
by many different information systems, including
local area networks, to deliver traffic at
varying rates, permitting a mix of voice, data
and video (multimedia).

AT&T....................... AT&T Corp.

Backbone................... The through-portions of a transmission network,
as opposed to spurs which branch off the through-
portions.

Band....................... A range of frequencies between two defined
limits.

Bandwidth.................. The relative range of analog frequencies or
digital signals that can be passed through a
transmission medium, such as glass fibers,
without distortion. The greater the bandwidth,
the greater the information carrying capacity.
Bandwidth is measured in Hertz (analog) or Bits
Per Second (digital).

Bit Error Rate............. A measure of transmission quality stated as the
expected probability of error per bit
transmitted.

Capacity................... Refers to transmission.
Refers to transmission.

Carrier.................... A provider of communications transmission
services by fiber, wire or radio.

CLEC (Competitive Local
Exchange Carrier).........
A company that competes with LECs in the local
services market.

Common Carrier............. A government-defined group of private companies
offering telecommunications services or
facilities to the general public on a non-
discriminatory basis.

Dark Fiber................. Fiber that lacks the requisite electronic and
optronic equipment necessary to use the fiber for
transmission.

Digital.................... Describes a method of storing, processing and
transmitting information through the use of
distinct electronic or optical pulses that
represent the binary digits 0 and 1. Digital
transmission/ switching technologies employ a
sequence of discrete, distinct pulses to
represent information, as opposed to the
continuously variable analog signal.

G-1
<PAGE>

DS-0, DS-1, DS-3........... Standard telecommunications industry digital
signal formats, which are distinguishable by bit
rate (the number of binary digits (0 and 1)
transmitted per second). DS-0 service has a bit
rate of 64 kilobits per second and typically
transmits only one voice conversation at a time.
DS-1 service has a bit rate of 1.544 megabits per
second and typically transmits 24 simultaneous
voice conversations. DS-3 service has a bit rate
of 45 megabits per second and typically transmits
672 simultaneous voice conversations.

DWDM (Dense Wave Division
Multiplexing)............. A technique for transmitting 8 or more different
light wave frequencies on a single fiber to
increase the information carrying capacity.

DS-3 miles................. A measure of the total capacity and length of a
transmission path, calculated as the capacity of
the transmission path in DS-3s multiplied by the
length of the path in miles.

Equal access............... The basis upon which customers of interexchange
carriers are able to obtain access to their
Primary Interexchange Carriers' (PIC) long
distance telephone network by dialing "1", thus
eliminating the need to dial additional digits
and an authorization code to obtain such access.

FBCs (Facilities Based
Carriers)................. Facilities based carriers that own and operate
their own network and equipment.

FCC........................ Federal Communications Commission.

Frame Relay................ A high-speed, data-packet switching service used
to transmit data between computers. Frame Relay
supports data units of variable lengths at access
speeds ranging from 56 kilobits per second to 1.5
megabits per second. This service is well-suited
for connecting local area networks, but is not
presently well suited for voice and video
applications due to the variable delays which can
occur. Frame Relay was designed to operate at
high speeds on modern fiber optic networks.

Gbps....................... Gigabits per second, which is a measurement of
speed for digital signal transmission expressed
in billions of bits per second.

GTE........................ GTE Intelligent Network Services Incorporated.

Hertz...................... The unit for measuring the frequency with which
an electromagnetic signal cycles through the
zero-value state between lowest and highest
states. One Hz (Hertz) equals one cycle per
second. kHz (kilohertz) stands for thousands of
Hertz; MHz (megahertz) stands for millions of
Hertz.

ISP (Internet Service
Provider)................. A company that provides businesses and consumers
with access to the Internet.

G-2
<PAGE>

10XXX Service.............. The ability for a user to access any carrier's
long distance network by dialing the carrier's
Carrier Identification Code (CIC) which is a 1
plus 0 plus three specifically assigned digits,
thereby bypassing the user's primary
interexchange carrier.

Interconnect............... Connection of a telecommunications device or
service to the public switched telephone network
("PSTN").

Interexchange carrier...... A company providing inter-LATA or long distance
services between LATAs on an intrastate or
interstate basis.

Kbps....................... Kilobits per second, which is a measurement of
speed for digital signal transmission expressed
in thousands of bits per second.

LATAs (Local Access and
Transport Areas).......... The approximately 200 geographic areas that
define the areas between which the RBOCs
currently are prohibited from providing long
distance services.

LEC (Local Exchange
Carrier).................. A company historically providing local telephone
services.

Lit fiber.................. Fiber activated or equipped with the requisite
electronic and optronic equipment necessary to
use the fiber for transmission.

Local loop................. A circuit that connects an end user to the LEC
central office within a LATA.

Long-haul circuit.......... A dedicated telecommunications circuit generally
between locations in different LATAs.

Mbps....................... Megabits per second, which is a measurement of
speed for digital signal transmission expressed
in millions of bits per second.

MCI........................ MCI Communications, Inc.

MOU........................ Minutes of use of long distance service.

Multiplexing............... An electronic or optical process that combines a
large number of lower speed transmission lines
into one high speed line by splitting the total
available bandwidth into narrower bands
(frequency division), or by allotting a common
channel to several different transmitting
devices, one at a time in sequence (time
division).

OC-3, OC-12, OC-48 and
OC-192.................... OC is a measure of SONET transmission optical
carrier level, which is equal to the
corresponding number of DS-3s (e.g. OC-3 is equal
to 3 DS-3s and OC-48 is equal to 48 DS-3s).

RBOCs (Regional Bell
Operating Companies)...... The seven local telephone companies (formerly
part of AT&T) established as a result of the AT&T
Divestiture Decree.

G-3
<PAGE>

Regeneration/amplifier..... Devices which automatically re-transmit or boost
signals on an out-bound circuit.

Reseller................... A carrier that does not own transmission
facilities, but obtains communications services
from another carrier for resale to the public.

SONET (Synchronous Optical
Network Technology)....... An electronics and network architecture for
variable-bandwidth products which enables
transmission of voice, data and video
(multimedia) at very high speeds.

SONET ring................. A network architecture which provides for
instantaneous restoration of service in the event
of a fiber cut by automatically rerouting traffic
the other direction around the ring. This occurs
so rapidly (in 50 milliseconds) it is virtually
undetectable to the user.

Spectrum................... A term generally applied to radio frequencies.

Sprint..................... Sprint Corporation

Switch..................... A device that selects the paths or circuits to be
used for transmission of information and
establishes a connection. Switching is the
process of interconnecting circuits to form a
transmission path between users and it also
captures information for billing purposes.
Switched service
carriers.................. A carrier that sells switched long distance
service and generally refers to a carrier that
owns its switch.

Switchless resellers....... A carrier that does not own facilities or
switches, but purchases minutes in high volumes
from other carriers and resells those minutes.

Terabits................... A trillion bits of transmission capacity.

Trunk...................... A communications channel between two switches.
"Trunking" calls reduces the likelihood of
traffic blockage due to network congestion. A
trunked system combines multiple channels with
unrestricted access in such a manner that user
demands for channels are automatically "queued"
and then allocated to the first available
channel.

WorldCom................... WorldCom, Inc.

G-4
<PAGE>

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR IN-
CORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AF-
FAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHO-
RIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALI-
FIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITA-
TION.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Additional Information................................................... 3
Prospectus Summary....................................................... 4
Summary Consolidated Financial and Operating Data........................ 13
Risk Factors............................................................. 15
The Exchange Offer....................................................... 22
Use of Proceeds.......................................................... 29
Capitalization........................................................... 30
Selected Consolidated Financial Data..................................... 31
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 33
Industry Overview........................................................ 44
Business................................................................. 48
Regulation............................................................... 60
Management............................................................... 66
Principal Stockholder.................................................... 79
Certain Transactions..................................................... 79
Description of the Notes................................................. 81
Description of Certain Indebtedness...................................... 110
Certain United States Federal Income Tax Considerations.................. 112
Plan of Distribution..................................................... 115
Legal Matters............................................................ 116
Experts.................................................................. 116
Index to Consolidated Financial Statements............................... F-1
Glossary................................................................. G-1
</TABLE>

QWEST COMMUNICATIONS INTERNATIONAL INC.

OFFER TO EXCHANGE
10 7/8% SERIES B SENIOR NOTES DUE 2007 FOR ANY AND ALL OF ITS OUTSTANDING 10
7/8% SENIOR NOTES DUE 2007

[LOGO OF QWEST COMMUNICATIONS INTERNATIONAL INC. APPEARS HERE]

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ],
1997, UNLESS EXTENDED; PROVIDED IT MAY NOT BE EXTENDED BEYOND [ ], 1997.

PROSPECTUS

DATED JULY , 1997
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law ("DGCL") empowers a
Delaware corporation to indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation), by reason of the fact
that such person is or was an officer or director of such corporation, or is
or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding, if
such officer or director acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such officer's or director's conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an action by or
in the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation in the performance of his
duty. Where an officer or director is successful on the merits or otherwise in
the defense of any action referred to above, the corporation must indemnify
such officer or director against the expenses which such officer or director
actually and reasonably incurred.

In accordance with Section 102(b)(7) of the DGCL, the Company's Certificate
of Incorporation provides that directors shall not be personally liable for
monetary damages for breaches of their fiduciary duty as directors except for
(i) breaches of their duty of loyalty to the Company or its stockholders, (ii)
acts or omissions not in good faith or which involve intentional misconduct or
knowing violations of law, (iii) certain transactions under Section 174 of the
DGLC (unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) transactions from which a director derives an improper
personal benefit. The effect of this provision is to eliminate the personal
liability of directors for monetary damages for actions involving a breach of
their fiduciary duty of care, including any actions involving gross
negligence.

The Certificate of Incorporation and the By-laws of the Company provide for
indemnification of the Company's officers and directors to the fullest extent
permitted by applicable law, except that the By-laws provide that the Company
is required to indemnify an officer or director in connection with a
proceeding initiated by such person only if the proceeding was authorized by
the Board of Directors of the Company. In addition, the Company maintains
insurance policies which provide coverage for its officers and directors in
certain situations where the Company cannot directly indemnify such officers
or directors.

Pursuant to Section 145 of the DGCL and the Certificate of Incorporation and
the By-laws of the Company, the Company maintains directors' and officers'
liability insurance coverage.

II-1
<PAGE>

ITEM 21. EXHIBITS AND FINANCIAL DATA SCHEDULES.

(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
1.1 --Purchase Agreement dated March 31, 1997, among the Company and
Salomon Brothers Inc, Donaldson, Lufkin & Jenrette Securities
Corporation and Goldman, Sachs & Co.
3.1* --Amended and Restated Certificate of Incorporation of the Company.
3.2* --By-laws of the Company.
4.1* --Indenture dated as of March 31, 1997 with Bankers Trust Company
(including form of the Company's 10 7/8% Senior Notes Due 2007 as an
exhibit thereto).
4.2* --Registration Agreement dated March 31, 1997 with Salomon Brothers
Inc relating to the Company's 10 7/8% Senior Notes Due 2007.
4.3 --Form of Exchange Note (contained in Form of Indenture filed as
Exhibit 4.4).
4.4 --Form of Indenture between the Company and Bankers Trust Company
relating to the Company's Series B Senior Notes due 2007.
5.1 --Opinion of Holme Roberts & Owen LLP with respect to the legality of
the securities being registered.
8 --Opinion of Holme Roberts & Owen LLP with respect to certain tax
matters.
10.1* --Growth Share Plan, as amended, effective October 1, 1996.
10.2* --Employment Agreement dated December 21, 1996 with Joseph P. Nacchio.
10.3* --Promissory Note dated November 20, 1996 and Severance Agreement
dated December 1, 1996 with Robert S. Woodruff.
10.4* --Settlement Agreement, General Release and Covenant Not to Sue dated
as of November 11, 1996 with Douglas H. Hanson.
10.5*+ --IRU Agreement dated as of October 18, 1996 with Frontier
Communications International Inc.
10.6*+ --IRU Agreement dated as of February 26, 1996 with WorldCom Network
Services, Inc.
10.7*+ --IRU Agreement dated as of May 2, 1997 with GTE.
10.8* --Equity Incentive Plan.
11.1* --Statement re Computation of Per Share Earnings.
12.1 --Statement re Computation of Ratios.
21* --Subsidiaries of the Registrant.
23.1 --Consent of KPMG Peat Marwick LLP.
23.2 --Consent of Holme Roberts & Owen LLP (contained in Exhibit 5.1).
24 --Power of Attorney (included on the signature page in Part II of this
Registration Statement).
25 --Statement of Eligibility of Bankers Trust Company; Form T-1.
99.1 --Letter of Transmittal relating to the Exchange Offer.
99.2 --Notice of Guaranteed Delivery relating to the Exchange Offer.
99.3 --Guidelines for W-9.
99.4 --Letter to Brokers, Dealers, Commercial Banks, Trust Companies, and
Other Nominees relating to the Exchange Offer.
99.5 --Letter to Clients relating to the Exchange Offer.
</TABLE>
- --------
* Incorporated by reference to the exhibit of the same number in Form S-1 as
declared effective on June 23, 1997 (File No. 333-25391).
+ Portions have been omitted pursuant to a request for confidential treatment.

(b) Financial Statement Schedules. Incorporated by reference to Form S-1 as
declared effective on June 23, 1997 (File No. 333-25391).

II-2
<PAGE>

ITEM 22. UNDERTAKINGS.

(a) The undersigned Company hereby undertakes:

(1) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) under the Securities Act of 1933, as amended
(the "Securities Act"), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items
of the applicable form.

(2) That every prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements of
section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415 under the Securities Act, will
be filed as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act, each such post-
effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.

(c) The undersigned Company hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.

(d) The undersigned Company hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.

(e) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

II-3
<PAGE>

(f) The undersigned Company hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of Prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement; and

(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed part of the registration
statement as of the time it was declared effective.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
COMPANY HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF DENVER, STATE OF
COLORADO ON JUNE 27, 1997.

Qwest Communications International
Inc.

By: /s/ Joseph P. Nacchio
---------------------------------
President and Chief Executive
Officer

POWER OF ATTORNEY AND SIGNATURES

WE, THE UNDERSIGNED OFFICERS AND DIRECTORS OF QWEST COMMUNICATIONS
INTERNATIONAL INC. HEREBY SEVERALLY CONSTITUTE AND APPOINT JOSEPH P. NACCHIO,
ROBERT S. WOODRUFF AND RICHARD L. SMITH, AND EACH OF THEM SINGLY, OUR TRUE AND
LAWFUL ATTORNEYS, WITH FULL POWER TO THEM AND EACH OF THEM SINGLY, TO SIGN FOR
US IN OUR NAMES IN THE CAPACITIES INDICATED BELOW, ALL PRE-EFFECTIVE AND POST-
EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT AND ANY ABBREVIATED
REGISTRATION STATEMENT IN CONNECTION WITH THIS REGISTRATION STATEMENT PURSUANT
TO RULE 462(B) UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND GENERALLY TO
DO ALL THINGS IN OUR NAMES AND ON OUR BEHALF IN SUCH CAPACITIES TO ENABLE THE
COMPANY TO COMPLY WITH THE PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND ALL REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE TITLE DATE

/s/ Chairman of the June 27, 1997
- ------------------------------------- Board
PHILIP F. ANSCHUTZ

/s/ Director, President June 27, 1997
- ------------------------------------- and Chief Executive
JOSEPH P. NACCHIO Officer (Principal
Executive Officer)

/s/ Director and June 27, 1997
- ------------------------------------- Executive Vice
ROBERT S. WOODRUFF President--Finance
and Chief Financial
Officer and
Treasurer
(Principal
Financial Officer)

II-5
<PAGE>

SIGNATURE TITLE DATE

/s/ Vice President and June 27, 1997
- ------------------------------------- Controller
RICHARD L. SMITH (Principal
Accounting Officer)

/s/ Director June 27, 1997
- -------------------------------------
CANNON Y. HARVEY

/s/ Director June 27, 1997
- -------------------------------------
RICHARD T. LIEBHABER

/s/ Director June 27, 1997
- -------------------------------------
DOUGLAS L. POLSON

/s/ Director June 27, 1997
- -------------------------------------
CRAIG D. SLATER

II-6

<PAGE>

EXHIBIT 1.1

================================================================================

QWEST COMMUNICATIONS INTERNATIONAL INC.

$250,000,000 10 7/8% Senior Notes Due 2007

PURCHASE AGREEMENT

Dated: March 25, 1997

================================================================================
<PAGE>

QWEST COMMUNICATIONS INTERNATIONAL INC.

$250,000,000 10 7/8% SENIOR NOTES DUE 2007

PURCHASE AGREEMENT

New York, New York
March 25, 1997

Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
As Representatives of the Initial Purchasers
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048

Ladies and Gentlemen:

Qwest Communications International Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the parties named in Schedule I hereto
(the "Initial Purchasers"), for whom you are acting as representatives (the
"Representatives"), $250,000,000 aggregate principal amount of its 10 7/8%
Senior Notes Due 2007 (the "Securities"). The Securities are to be issued under
an indenture (the "Indenture") dated as of March 31, 1997 between the Company
and Bankers Trust Company, as trustee. If you are the only Initial Purchasers,
all references herein to the Representatives shall be deemed to be to the
Initial Purchasers.

The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Initial Purchasers will offer and sell the Securities purchased by them
hereunder in accordance with Section 4 hereof as soon as you deem advisable.

The holders of the Securities will be entitled to the benefits of a
Registration Agreement dated as of March 31, 1997 between the Company and
Salomon Brothers Inc (the "Registration Agreement"), pursuant to which the
Company will file a registration statement with the Securities and Exchange
Commission (the "Commission") registering the Securities or New Securities
(referred to in the Registration Agreement) under the Securities Act.

In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated March 7, 1997 (the
"Preliminary Memorandum") and a final offering memorandum, dated March 25, 1997
(the "Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchasers. Unless stated to the contrary, all references herein to the Final
Memorandum are to the Final Memorandum at the Execution Time (as defined in
<PAGE>

Section 6 hereof) and are not meant to include any amendment or supplement
subsequent to the Execution Time.

1. Representations and Warranties. The Company represents and
------------------------------
warrants to each Initial Purchaser as set forth below in this Section 1.

(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the
date hereof, does not, and at the Closing Date (as defined below) will not
(and any amendment or supplement thereto, at the date thereof and at the
Closing Date, will not), contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or
-------- -------
warranty as to the information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto,
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchasers through the
Representatives specifically for inclusion therein.

(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has full power
(corporate and other) to own or lease its properties and conduct its
business as described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except where the
failure to be qualified would not have a material adverse effect on the
Company or any of its subsidiaries.

(c) The Company has full power (corporate and other) to enter into and
to perform its obligations under this Agreement, the Indenture, the
Registration Agreement and the Securities.

(d) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and, except as otherwise set forth in the Final
Memorandum, are owned beneficially by the Company free and clear of any
security interests, liens, encumbrances, equities or claims.

(e) The Company has an authorized, issued and outstanding
capitalization as set forth in the Final Memorandum. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable.

(f) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included in the Final Memorandum fairly
present the financial position of the Company and its consolidated
subsidiaries and the results of operations and changes in financial
condition as of the dates and for the periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein). The selected
financial data set forth under the caption "Selected Consolidated
<PAGE>

Financial Data" in the Final Memorandum fairly present, on the basis stated
in the Final Memorandum, the information included therein.

(g) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Final Memorandum, are independent public
accountants within the meaning of the Securities Act and the applicable
rules and regulations thereunder.

(h) This Agreement has been duly authorized, executed, and delivered
by the Company.

(i) The Registration Agreement has been duly authorized by the Company
and, when duly executed and delivered by the Company, will constitute
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect, general principles of equity and to the enforcement of the
indemnification or contribution provisions contained therein).

(j) The Indenture has been duly authorized by the Company and, when
duly executed and delivered by the Company and the Trustee, will constitute
a valid and binding instrument enforceable against the Company in
accordance with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect, and
general principles of equity); the Securities have been duly and validly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to this Agreement, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture; and
the statements set forth under the heading "Description of the Notes" in
the Final Memorandum, insofar as such statements purport to summarize
certain provisions of the Securities and the Indenture, provide a fair
summary of such provisions.

(k) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are not described in
the Final Memorandum, and no such proceedings have been threatened against
the Company or any of its subsidiaries or with respect to any of their
respective properties, except in each case for such proceedings that, if
the subject of an unfavorable decision, ruling or finding, would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries.

(l) The issuance, offering and sale of the Securities to the Initial
Purchasers by the Company pursuant to this Agreement, the performance by
the Company of its obligations under this Agreement, the Registration
Agreement, the Indenture and the Securities, the consummation of the
transactions herein and therein and the application of proceeds from the
sale of the Securities as described in the Final Memorandum do not (i)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained
and such as may be required under state securities or blue
<PAGE>

sky laws and except as may be required under the Securities Act and the
rules and regulations thereunder with respect to the Registration Agreement
and transactions contemplated thereunder or (ii) conflict with or result in
a breach or violation of any of the terms and provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or any of their
respective properties are bound, or the charter documents or by-laws of the
Company or any of its subsidiaries, or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or
any arbitrator applicable to the Company or any of its subsidiaries.

(m) The Company has not (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except for the sale of Securities by the Initial Purchasers under
this Agreement).

(n) Subsequent to the respective dates as of which information is
given in the Final Memorandum, (i) the Company and its subsidiaries have
not incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction whether or not in the ordinary
course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; (iii) there has
not been any material change in the capital stock, short-term debt or long-
term debt of the Company and its consolidated subsidiaries, except in each
case as described in or contemplated by the Final Memorandum; and (iv)
there has not been any material adverse change in the condition (financial
or otherwise), earnings, business affairs or business prospects of the
Company and its consolidated subsidiaries whether or not arising in the
ordinary course of business.

(o) The Company and each of its subsidiaries own or hold all items of
property owned or held by each of them free and clear of any security
interests, liens, encumbrances, equities, claims and other defects, except
such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Company or such subsidiary, and any real property and
buildings held under lease by the Company or any such subsidiary are held
under valid, subsisting and enforceable leases, with such exceptions as are
not material and do not interfere with the use made or proposed to be made
of such property and buildings by the Company or such subsidiary, in each
case except as described in or contemplated by the Final Memorandum.

(p) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Final
Memorandum.

(q) The Company and its subsidiaries own or possess all material
patents, patent applications, trademarks, service marks, trade names,
licenses, copyrights and proprietary or other confidential information
<PAGE>

currently employed by them in connection with their respective businesses,
and neither the Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Final
Memorandum.

(r) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Final Memorandum.

(s) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Final Memorandum.

(t) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Final Memorandum.

(u) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
and has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such tax, assessment, fine or penalty
that is currently being contested in good faith or as described in or
contemplated by the Final Memorandum.

(v) Neither the Company nor any of its subsidiaries is in violation of
any federal or state law or regulation relating to occupational safety and
health or to the storage, handling or transportation of hazardous or toxic
materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and
state occupational safety and health and environmental laws and regulations
to conduct their
<PAGE>

respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals which
would not, singly or in the aggregate, result in a material adverse change
in the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Final Memorandum.

(w) Each certificate signed by any officer of the Company and
delivered to the Representatives or Counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company (and not
individually by such officer) to the Initial Purchasers as to the matters
covered thereby.

(x) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable and appropriate
intervals and appropriate action is taken with respect to any differences.

(y) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties is bound
or may be affected in any material adverse respect with regard to property,
business or operations of the Company and its subsidiaries.

(z) Neither the Company, nor any of its Affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")), nor any
person acting on its or their behalf has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration of the Securities
under the Securities Act.

(aa) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.

(bb) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.

(cc) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any directed selling efforts
with respect to the Securities, and each of them has complied with the
offering restrictions requirement of Regulation S ("Regulation S") under
the Securities Act. Terms used in this paragraph have the meanings given
to them by Regulation S.
<PAGE>

(dd) The Company has been advised by the National Association of
Securities Dealers, Inc. PORTAL Market that the Securities have been
designated "PORTAL-eligible securities" in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc.

(ee) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Final Memorandum will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), without taking account of any
exemption arising out of the number of holders of the Company's securities.

(ff) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment
Company Act.

(gg) The information provided by the Company pursuant to Section 5(h)
hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

(hh) There are no contracts or documents of a character that would be
required to be described in the Final Memorandum, if it were a prospectus
filed as part of a registration statement on Form S-1 under the Securities
Act, that are not described as would be so required.

(ii) Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 4, it is not necessary
in connection with the offer, sale and delivery of the Securities to the
Initial Purchasers and the resale to each subsequent purchaser in the
manner contemplated by this Agreement and the Final Memorandum to register
the Securities under the Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended.

2. Purchase and Sale. Subject to the terms and conditions and in
-----------------
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97.250% of the aggregate principal amount thereof, plus accrued interest, if
any, from March 31, 1997 to the Closing Date, the aggregate principal amount of
Securities set forth opposite such Initial Purchaser's name in Schedule I
hereto.

3. Delivery and Payment. Delivery of and payment for the Securities
--------------------
shall be made at 10:00 AM, New York City time, on March 31, 1997, or such later
date (not later than April 7, 1997) as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the Initial Purchasers against payment by the Initial
Purchasers through the Representatives of the purchase price thereof to or upon
the order of the Company by wire transfer of federal funds or other immediately
available funds or such other manner of payment as may be agreed by the Company
and the Representatives. Delivery of the Securities shall be made at such
location as the Representatives shall reasonably designate at least one business
day in advance of the Closing Date
<PAGE>

and payment for the Securities shall be made at the office of Shearman &
Sterling ("Counsel for the Initial Purchasers"), 599 Lexington Avenue, New York,
New York. Certificates for the Securities shall be registered in such names and
in such denominations as the Representatives may request not less than three
full business days in advance of the Closing Date.

The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.

4. Offering of Securities. Each Initial Purchaser, severally and
----------------------
not jointly, represents and warrants to and agrees with the Company that:

(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A, (ii) to other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D) who provide to it and to the Company a letter
in the form of Exhibit A hereto or (iii) in accordance with the
restrictions set forth in Exhibit B hereto.

(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities by means of any form of general
solicitation or general advertising (within the meaning of Regulation D) in
the United States.

5. Agreements. The Company agrees with each Initial Purchaser that:
----------

(a) The Company will furnish to each Initial Purchaser and to Counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as it may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.

(b) The Company will not amend or supplement the Final Memorandum
without the prior written consent of the Representatives as contemplated by
paragraph (c) below.

(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Representatives of the same and, subject
to the requirements of paragraph (b) of this Section 5, will prepare and
provide as promptly as practicable to the Representatives pursuant to
paragraph (a) of this Section 5 an amendment or supplement which will
correct such statement or omission or effect such compliance.

(d) The Company will arrange for the qualification of the Securities
for sale by the Initial Purchasers under the laws of such
<PAGE>

jurisdictions as the Initial Purchasers may reasonably designate and will
maintain such qualifications in effect so long as required for the sale of
the Securities. The Company will promptly advise the Representatives of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.

(e) The Company will not, and will not permit any of its Affiliates
to, resell any Securities that have been acquired by any of them.

(f) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under
the Securities Act.

(g) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.

(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, unless it becomes subject to and complies with Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities
Act. This covenant is intended to be for the benefit of the holders, and
the prospective purchasers designated by such holders, from time to time of
such restricted securities.

(i) Neither the Company nor any of its Affiliates nor any person
acting on its or their behalf will engage in any directed selling efforts
with respect to the Securities, and each of them will comply with the
offering restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them by Regulation S.

(j) The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.

(k) The Company will not, until 180 days following the Closing Date,
without the prior written consent of the Representatives, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Company (other than the Securities or as otherwise contemplated by the
Registration Agreement).

(l) In connection with any disposition of Securities pursuant to a
transaction made in compliance with paragraph 6 of Exhibit A, the Company
will reissue certificates evidencing such Securities without the legend
referred to in paragraph 5 of Exhibit A (provided, in the case of a
transaction made in compliance with paragraph 6(f) of Exhibit A, that the
legal opinion referred to therein so permits).
<PAGE>

6. Conditions to the Obligations of the Initial Purchasers. The
-------------------------------------------------------
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time") and the Closing Date,
to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:

(a) The Company shall have furnished to the Representatives the
opinion of Holme Roberts & Owen LLP, counsel for the Company, dated the
Closing Date, to the effect that:

(i) each of the Company, Qwest Corporation ("QC"), Qwest
Communications Corporation ("QCC") and Qwest Transmission Inc. ("QTI")
(collectively, the "Subsidiaries" and individually, a "Subsidiary")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction that requires such qualification in which it owns or
leases material properties or conducts material business, except for
such jurisdictions where the failure to so qualify or to be in good
standing would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, and the Company
has full corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Agreement, the
Indenture and the Securities;

(ii) all of the outstanding shares of capital stock of the
Company and each of the Subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Memorandum, all outstanding
shares of capital stock of the Subsidiaries are owned by the Company
either directly or through a wholly owned Subsidiary, free and clear
of (to the best of such counsel's knowledge after due inquiry) any
security interests and any other claims, liens or encumbrances;

(iii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum;

(iv) the Indenture has been duly authorized, executed and
delivered and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject,
as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other
laws affecting creditors' rights generally from time to time in
effect, and to general equitable
<PAGE>

principles); the Securities have been duly and validly authorized and,
when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial Purchasers
pursuant to this Agreement, will constitute legal, valid and binding
obligations of the Company (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and to general equitable
principles) entitled to the benefits of the Indenture; and the
Securities and the Indenture conform as to legal matters in all
material respects to the descriptions thereof set forth under the
heading "Description of the Notes" in the Final Memorandum;

(v) the information contained in the Final Memorandum under the
headings "Description of Certain Indebtedness," "Certain United States
Federal Income Taxes" and "Certain Transactions" fairly summarizes in
all material respects the matters therein described and to the extent
that such statements purport to describe certain provisions of U.S.
federal laws, rules or regulations, have been reviewed by such counsel
and are correct as to legal matters in all material respects;

(vi) this Agreement has been duly authorized, executed and
delivered by the Company:

(vii) the Registration Agreement has been duly authorized,
executed and delivered by the Company, and constitutes legal, valid
and binding obligations of the Company enforceable against the Company
in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and to general
principles of equity), and further such counsel expresses no opinion
as to the enforceability of the indemnification or contribution
provisions contained therein, and the Registration Agreement conforms
as to legal matters in all material respects to the description
thereof contained in the Final Memorandum;

(viii) no consent, approval, authorization or order of any court
or governmental agency or body (other than such as may be required
under the applicable securities laws of the various jurisdictions in
which the Securities will be offered or sold, as to which such counsel
expresses no opinion, or as required in connection with the
transactions contemplated by the Registration Agreement) is required
in connection with the due authorization, execution and delivery of
this Agreement, the Registration Agreement or the Indenture or for the
offering, issuance, sale or delivery of the Securities to the Initial
Purchasers or the resale of the Securities by the Initial Purchasers
in accordance with this Agreement;

(ix) the issue and sale of the Securities, the execution and
delivery of this Agreement, the Registration Agreement, the Indenture
and the Securities, the consummation of the transactions contemplated
by this Agreement and the application of proceeds from the sale of the
Securities as described in the Final Memorandum and the compliance by
the Company with its obligations under this Agreement, the
Registration Agreement, the Indenture or the Securities, will not
conflict with, result in a breach or violation of, or constitute a
default under any applicable law or the charter or bylaws of the
Company or any of the Subsidiaries or the terms of any indenture or
other agreement or instrument known to such counsel to which the
Company or any of the Subsidiaries is a party or bound or any
judgment, order or decree known to such counsel to be applicable to
the Company or any of the Subsidiaries of any court, regulatory body,
administrative agency, governmental body or
<PAGE>

arbitrator having jurisdiction over the Company or any of the
Subsidiaries;

(x) assuming the accuracy of the representations and warranties
and compliance with the agreements contained in this Agreement, no
registration of the Securities under the Securities Act is required,
and no qualification of the Indenture under the Trust Indenture Act of
1939 is necessary, for the purchase by the Initial Purchasers of the
Securities, or the offer and sale by the Initial Purchasers of the
Securities, in each case, in the manner contemplated by this Agreement
(and not taking into account the transactions contemplated by the
Registration Agreement);

(xi) the Company is not an "investment company" within the
meaning of the Investment Company Act of 1940 without taking account
of any exemption arising out of the number of holders of the Company's
securities;

(xii) no legal or governmental proceedings are pending to which
the Company or any of its Subsidiaries is a party or to which the
property of the Company or any of its Subsidiaries is subject, as
would be required to be described in the Final Memorandum, that are
not described in the Final Memorandum and, to the best of such
counsel's knowledge after due inquiry, no such proceedings have been
threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties.

Such counsel shall also state that they have no reason to believe that
at the Execution Time or at the Closing Date the Final Memorandum contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
--------
however, that such counsel expresses no belief as to the financial
-------
statements, including the notes thereto, or supporting schedules or other
financial and accounting data included in the Final Memorandum.

In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York, the State of Colorado, the federal laws of the United States
or the corporate law of the State of Delaware, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel
(including in-house counsel) of good standing whom they believe to be
reliable and who are satisfactory to Counsel for the Initial Purchasers and
(B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.

All references in this Section 6(a) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.

(b) The Company shall have furnished to the Representatives the
opinion of Morrison & Foerster LLP, special federal regulatory counsel for
the Company, dated the Closing Date, to the effect that:

(i) (A) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the issue
and sale of the Securities contemplated hereby and thereby do not
violate (1) the Communications Act, (2) the Telecom Act of 1996 or (3)
any rules or regulations of the FCC applicable to the Company or its
subsidiaries, and (B) no authorization of or filing with the
<PAGE>

FCC is necessary for the execution and delivery of this Agreement, the
Registration Agreement or the Indenture by the Company and the issue
and sale of the Securities contemplated hereby and thereby in
accordance with the terms hereof and thereof;

(ii) QCC is a nondominant carrier authorized by the FCC to
provide domestic interstate interexchange telecommunications services
as described in such opinion without any further order, license,
permit or other authorization by the FCC. QCC also has been granted
Section 214 authority by the FCC to provide international switched
resale telecommunications services as described in such opinion. QCC
has on file with the FCC tariffs applicable to its domestic interstate
and international services. No other FCC authority is required, and no
other tariffs are required to be filed under the rules and regulations
of the FCC, for the conduct of QCC's telecommunications business as
described in the Final Memorandum;

(iii) QTI is a microwave carrier authorized by the FCC and holds
the licenses listed in such opinion. In addition, the licenses listed
in such opinion were held by Qwest Communications, Inc., control of
which was transferred by order of the FCC from MCI Communications
Corporation to Southern Pacific Telecommunications Corporation, QCC's
predecessor, on December 27, 1994. Qwest Communications, Inc.'s name
was subsequently changed to QTI on April 6, 1995. The FCC Files do
not reflect any other licensee name for the licenses listed in such
opinion. No further FCC authority is required for the conduct of
QTI's microwave telecommunications business as described in the Final
Memorandum, except to the extent that the absence of any such
authority, singly or in the aggregate, would not have a material
adverse effect on the business or operations of the Company or its
subsidiaries taken as a whole;

(iv) FSI Acquisition Corp. is a private carrier not subject to
Title II common carrier regulation under the Communications Act, as
amended by the Telecom Act of 1996;

(v) (A) QCC and QTI in all material respects (1) have made all
reports and filings, and paid all fees, required by the FCC; and (2)
have all certificates, orders, permits, licenses, authorizations,
consents and approvals of and from, and have made all filings and
registrations with, the FCC necessary to own, lease, license and use
their properties and assets and to conduct their business in the
manner described in the Final Memorandum; and (B) to the best of such
counsel's knowledge, neither QCC nor QTI has received any notice of
proceedings relating to the revocation or modification of any such
certificates, orders, permits, licenses, authorizations, consents or
approvals, or the qualification or rejection of any such filing or
registration, the effect of which, singly or in the aggregate, would
have a material adverse effect on the business or operations of the
Company and its subsidiaries taken as a whole as described in the
Final Memorandum;

(vi) to the best of such counsel's knowledge, neither QCC nor QTI
is in violation of, or in default under, the Communications Act, as
amended by the Telecom Act of 1996, or the rules or regulations of the
FCC, the effect of which, singly or in the aggregate, would have a
material adverse effect on the business or operations of the
<PAGE>

Company and its subsidiaries taken as a whole as described in the
Final Memorandum;

(vii) (A) no decree or order of the FCC is outstanding against
QCC or QTI and (B) to the best of such counsel's knowledge, no formal
litigation, proceeding, inquiry or investigation has been commenced or
threatened, and no formal notice of violation or order to show cause
has been issued, against QCC or QTI before or by the FCC; and

(viii) the statements in the Final Memorandum under the captions
"Risk Factors--Regulation Risks" and "Regulation," insofar as such
statements constitute a summary of the legal matters, documents or
proceedings of the FCC with respect to the telecommunications
regulation referred to therein, are accurate in all material respects
and fairly summarize all matters referred to therein.

(c) (A) The Company shall have furnished to the Representatives the
opinion of Goodin, MacBride, Squeri, Schlotz & Ritchie, LLP, special state
regulatory counsel for the Company for the State of California, dated the
Closing Date, to the effect that:

(i) (x) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the issue
and sale of the Securities contemplated hereby and thereby do not
violate (1) any laws administered by, rules, regulations or published
policies of the California Public Utilities Commission (the
"California PUC") ("PUC Laws") or any other state laws governing the
provision of telecommunications services in the State of California
("Telecommunications Laws") applicable to the Company or its
subsidiaries, or (2) any decree from any California court relating to
telecommunications matters, and (y) no authorization of or filing with
the California PUC in the State of California is necessary for the
execution and delivery of this Agreement, the Registration Agreement
or the Indenture by the Company and the issue and sale of the
Securities contemplated hereby and thereby in accordance with the
terms hereof and thereof;

(ii) QCC is certified, registered or otherwise authorized, or is
not required to obtain authority, to provide intrastate interexchange
telecommunications services in the State of California. QCC has a
tariff on file in the State of California and no further tariffs are
required to be filed by QCC or the Company in the State of California
to conduct the Company's telecommunications business as described in
the Final Memorandum;

(iii) (x) QCC and the Company (1) have made all reports and
filings, and paid all fees, required by the California PUC in the
State of California; and (2) have all certificates, orders, permits,
licenses, authorizations, consents and approvals of and from, and have
made all filings and registrations with, the California PUC in the
State of California necessary to own, lease, license and use their
properties and assets and to conduct their business in the manner
described in the Final Memorandum; and (y) neither QCC nor the Company
has received any notice of proceedings relating to the revocation or
modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, or the qualification or
rejection of any such filing or registration, the
<PAGE>

effect of which, singly or in the aggregate, would have a material
adverse effect on the Company's, and its subsidiaries' taken as a
whole, telecommunications business or operations, as described in the
Final Memorandum;

(iv) neither the Company nor QCC is in violation of, or in
default under any PUC Laws or any Telecommunications Laws, the effect
of which, singly or in the aggregate, would have a material adverse
effect on the Company's, and its subsidiaries' taken as a whole,
telecommunications business or operations, as described in the Final
Memorandum; and

(v) (x) no decree or order of the California PUC in the State of
California is outstanding against the Company or any of its
subsidiaries and (y) no formal litigation, proceeding, inquiry or
investigation has been commenced or threatened, and no notice of
violation or order to show cause has been issued, against the Company
or any of its subsidiaries before or by the California PUC or any
other regulatory agency in the State of California.

(B) The Company shall have furnished to the Representatives the
opinion of Bickerstaff, Heath Smiley, Pollan, Kever & McDaniel LLP, special
state regulatory counsel for the Company for the State of Texas, dated the
Closing Date, to the effect that:

(i) (x) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the issue
and sale of the Securities do not violate any telecommunications laws
of the State of Texas applicable to the Company or QCC or, to the best
of such counsel's knowledge, any decree from any court of the State of
Texas relating to the telecommunications operations of the Company or
QCC, and (y) no authorization of or filing with the Public Utility
Commission of Texas (the "Texas PUC") is necessary for the execution
and delivery of this Agreement, the Registration Agreement or the
Indenture by the Company or the issue and sale of the Securities
contemplated hereby and thereby in accordance with the terms of this
Agreement;

(ii) QCC is duly registered with the Texas PUC and authorized to
provide intrastate telecommunications services in Texas and no further
authority is required to be obtained by QCC or the Company from the
Texas PUC to conduct the Company's telecommunications business as
described in the Final Memorandum. QCC has a registration and price
list on file in Texas and no further tariffs are required to be filed
by QCC or the Company with the Texas PUC to conduct the Company's
telecommunications business as described in the Final Memorandum;

(iii) (x) QCC and the Company (1) have made all reports and
filings required by the Texas PUC; and (2) have all certificates,
orders, permits, licenses, authorizations, consents and approvals of
and from, and have made all filings and registrations with, the Texas
PUC necessary to own, lease, license and use their properties and
assets and to conduct the Company's telecommunications business in the
manner described in the Final Memorandum; and (y) neither QCC nor the
Company has received any notice of proceedings from the Texas PUC
relating to the revocation or modification of any such certificates,
orders, permits, licenses, authorizations, consents or approvals, or
the qualification or rejection of any such filing or
<PAGE>

registration, the effect of which, singly or in the aggregate, would
have a material adverse effect on the business or operations of the
Company and its subsidiaries taken as a whole as described in the
Final Memorandum;

(iv) neither QCC nor the Company is in violation of, or in
default under the telecommunications laws of the State of Texas, the
effect of which, singly or in the aggregate, would have a material
adverse effect on the business or operations of the Company and its
subsidiaries taken as a whole as described in the Final Memorandum;
and

(v) (x) no decree or order of the Texas PUC is outstanding
against QCC or the Company and (y) no formal litigation, proceeding,
inquiry or investigation has been commenced or threatened, and no
formal notice of violation or order to show cause has been issued,
against QCC or the Company before or by the Texas PUC.

(d) The Company shall have furnished to the Representatives the
opinion of Joseph Garrity, in-house counsel for the Company, dated the
Closing Date, to the effect that:

(i) (A) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the
issuance and sale of the Securities contemplated hereby and thereby do
not violate (1) any state telecommunications laws or regulations
("State Telecommunications Laws") applicable to the Company or QCC,
QTI or FSI Acquisition Corp. (together, the "Operating Subsidiaries")
or (2) any decree from any court relating to the telecommunications
operations of the Company or the Operating Subsidiaries, and (B) no
authorization of or filing with any Public Utilities Commission or
other state regulatory authority ("State Regulatory Agency") is
necessary for the execution and delivery of this Agreement, the
Registration Agreement or the Indenture by the Company and the
issuance and sale of the Securities contemplated hereby and thereby in
accordance with the terms hereof and thereof;

(ii) QCC is certified, registered or otherwise authorized, or is
not required to obtain authority to provide, intrastate interexchange
telecommunications services in the respective states listed in such
opinion. No further authority is required to be obtained by the
Company or any of the Operating Subsidiaries from any such state to
conduct the telecommunications business as described in the Final
Memorandum. QCC has a tariff or price list on file in each of the
states requiring such a filing as identified in such opinion. No
further tariffs are currently required to be filed by the Company or
any of the Operating Subsidiaries in any such state to conduct the
telecommunications business as described in the Final Memorandum;

(iii) except to the extent that the following would not have,
singly or in the aggregate, a material adverse effect on the business
or operations of the Company and its subsidiaries as described in the
Final Memorandum: (A) the Company and QCC (1) have made all reports
and filings, and paid all fees, required by State Regulatory Agencies;
and (2) have all certificates, orders, permits, licenses,
authorizations, consents and approvals of and from, and have made all
filings and registrations with, State Regulatory Authorities necessary
to own, lease, license and use their
<PAGE>

properties and assets and to conduct business in the manner described
in the Final Memorandum; and (B) neither the Company nor QCC has
received any notice of proceedings relating to the revocation or
modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, or the qualification or
rejection of any such filing or registration;

(iv) to the best of such counsel's knowledge, neither the Company
nor QCC is in violation of, or in default under any State
Telecommunications Law, the effect of which, singly or in the
aggregate, would have a material adverse effect on the business or
operations of the Company and its subsidiaries as described in the
Final Memorandum;

(v) (A) no decree or order of any State Regulatory Agency is
outstanding against the Company or any of the Operating Subsidiaries
and (B) no formal litigation, proceeding, inquiry or investigation has
been commenced or, to such counsel's knowledge, threatened, and no
formal notice of violation or order to show cause has been issued,
against the Company or any of the Operating Subsidiaries before or by
any State Regulatory Agency, the effect of which, singly or in the
aggregate, would have a material adverse effect on the business or
operations of the Company and its subsidiaries as described in the
Final Memorandum; and

(vi) the statements in the Final Memorandum under the captions
"Risk Factors--Regulation Risks" and "Regulation," insofar as such
statements constitute a summary of the legal matters, documents or
proceedings of the FCC and State Regulatory Agencies with respect to
telecommunications regulation referred to therein, are accurate in all
material respects and fairly summarize all matters referred to
therein, as of the date of publication of the Final Memorandum.

(e) The Representatives shall have received from Counsel for the
Initial Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Final Memorandum
(as amended or supplemented at the Closing Date) and other related matters
as the Representatives may reasonably require, and the Company shall have
furnished or made available to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.

(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully reviewed the Final Memorandum, any amendment or supplement
to the Final Memorandum and this Agreement and that:

(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date,
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date; and

(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material adverse
change in the condition (financial or other), earnings, business or
<PAGE>

properties of the Company and its subsidiaries, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).

(g) (A) At the Execution Time, KPMG Peat Marwick LLP shall have
furnished to the Representatives a letter dated such date, in form and
substance satisfactory to the Initial Purchasers, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Final Memorandum and (B) at
the Closing Date, KPMG Peat Marwick LLP shall have furnished to the
Representatives a letter dated such date, in form and substance
satisfactory to the Initial Purchasers, to the effect that they reaffirm
the statements made in the letter furnished pursuant to preceding sentence,
except that the specified date referred to shall be a date not more than
three business day prior to the Closing Date.

(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letters referred to in
paragraph (g) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company and its subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum.

(i) Prior to the Closing Date, the Company shall have furnished to the
Representatives such reasonable further information, certificates and
documents as the Representatives may reasonably request.

If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and Counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled at, or at any time prior to, the Closing Date by the Representatives.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.

The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers, at 599 Lexington
Avenue, New York, New York, on the Closing Date.

7. Reimbursement of Expenses. If the sale of the Securities
-------------------------
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers in payment for the Securities on the
Closing Date, the Company will reimburse the Initial Purchasers severally upon
demand for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
<PAGE>

8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum or any information provided by the
Company to any holder or prospective purchaser of Securities pursuant to Section
5(h), or in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any of the Initial
Purchasers through the Representatives specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.

(b) Each Initial Purchaser severally agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either the Securities Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Initial
Purchaser, but only with reference to written information relating to such
Initial Purchaser furnished to the Company by or on behalf of such Initial
Purchaser through the Representatives specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or on behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto).

(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve the
indemnifying party from liability under paragraph (a) or (b) above unless and to
the extent indemnifying party did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
<PAGE>

indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be satisfactory to
-------- -------
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.

(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and by
the Initial Purchasers from the offering of the Securities; provided, however,
-------- -------
that in no case shall any Initial Purchaser (except as may be provided in any
agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchasers shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the Initial
Purchasers in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions received by the Initial Purchasers from the Company in
connection with the purchase of the Securities hereunder. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Initial Purchasers. The
Company and the Initial Purchasers agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
<PAGE>

not guilty of such fraudulent misrepresentation. For purposes of this Section
8, each person who controls an Initial Purchaser within the meaning of either
the Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).

9. Default by an Initial Purchaser. If any one or more Initial
-------------------------------
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
--------
however, that in the event that the aggregate principal amount of Securities
- -------
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such non-defaulting Initial Purchasers do not purchase
all the Securities, this Agreement will terminate without liability to any non-
defaulting Initial Purchaser or the Company. In the event of a default by any
Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Final Memorandum or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Initial Purchaser of its liability, if
any, to the Company or any non-defaulting Initial Purchaser for damages
occasioned by its default hereunder.

10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared either by federal
or New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Memorandum.

11. Representation and Indemnities to Survive. The respective
-----------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
<PAGE>

12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, care of Salomon Brothers Inc, at
Seven World Trade Center, New York, New York 10048; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at Suite 1000, 555
Seventeenth Street, Denver, Colorado 80202, attention: Robert S. Woodruff,
Executive Vice President.

13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder.

14. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York.

15. Business Day. For purposes of this Agreement, "business day"
------------
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.

16. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
<PAGE>

If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Company and the Initial Purchasers.

Very truly yours,

QWEST COMMUNICATIONS INTERNATIONAL INC.

By /s/
----
Name: Joseph P. Nacchio
Title: President

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.

By: SALOMON BROTHERS INC

By /s/
----
Name: D. Scott Miller
Title: Director

For themselves and the other
Initial Purchasers named in
Schedule I to the foregoing Agreement
<PAGE>

SCHEDULE I

Principal Amount
of Securities to
Initial Purchasers be Purchased
- ------------------ ------------
<TABLE>
<CAPTION>

<S> <C>
Salomon Brothers Inc................................. $ 137,500,000
Donaldson, Lufkin & Jenrette Securities Corporation.. $ 62,500,000
Goldman, Sachs & Co.................................. $ 50,000,000

</TABLE>

Total................................. $ 250,000,000
<PAGE>

EXHIBIT A

Non-Distribution Letter for U.S. Purchasers
-------------------------------------------

_________, 1997

Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048

Qwest Communications International Inc.
Suite 1000
555 Seventeenth Street
Denver, Colorado 80202

Re: Purchase of $250,000,000 principal amount of 10 7/8% Senior Notes Due 2007
(the "Securities"), of Qwest Communications International Inc. (the
"Company")

Ladies and Gentlemen:

In connection with our purchase of the Securities we confirm that:

1. We understand that the Securities are not being and will not be
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and are being sold to us in a transaction that is exempt from the registration
requirements of the Securities Act.

2. We acknowledge that (a) neither the Company, nor the Initial
Purchasers (as defined in the Offering Memorandum dated March 25, 1997 relating
to the Securities (the "Final Memorandum")) nor any person acting on behalf of
the Company or the Initial Purchasers has made any representation to us with
respect to the Company or the offer or sale of any Securities and (b) any
information we desire concerning the Company and the Securities or any other
matter relevant to our decision to purchase the Securities (including a copy of
the Final Memorandum) is or has been made available to us.

3. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Securities, and we are (or any account for which we are purchasing under
paragraph 4 below is) an institutional "accredited investor" (within the meaning
of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
able to bear the economic risk of investment in the Securities.

4. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Securities, subject, nevertheless, to the
understanding that the disposition of our property will at all times be and
remain within our control.
<PAGE>

A-2

5. We understand that (a) the Securities will be in registered form
only and that any certificates delivered to us in respect of the Securities will
bear a legend substantially to the following effect:

"These Securities have not been registered under the Securities Act of
1933. Further offers or sales of these Securities are subject to
certain restrictions, as set forth in the Offering Memorandum dated
March 25, 1997 relating to these Securities."

and (b) the Company has agreed to reissue such certificates without the
foregoing legend only in the event of a disposition of the Securities in
accordance with the provisions of paragraph 6 below (provided, in the case of a
disposition of the Securities in accordance with paragraph 6(f) below, that the
legal opinion referred to in such paragraph so permits), or at our request at
such time as we would be permitted to dispose of them in accordance with
paragraph 6(a) below.

6. We agree that in the event that at some future time we wish to
dispose of any of the Securities, we will not do so unless such disposition is
made in accordance with any applicable securities laws of any state of the
United States and:

(a) the Securities are sold in compliance with Rule 144(k) under the
Securities Act; or

(b) the Securities are sold in compliance with Rule 144A under the
Securities Act; or

(d) the Securities are sold pursuant to an effective registration
statement under the Securities Act; or

(e) the Securities are sold to the Company or an affiliate (as defined
in Rule 501(b) of Regulation D) of the Company; or

(f) the Securities are disposed of in any other transaction that does
not require registration under the Securities Act, and we theretofore have
furnished to the Company or its designee an opinion of counsel experienced
in securities law matters to such effect or such other documentation as the
Company or its designee may reasonably request.

Very truly yours,

By
(Authorized Officer)
<PAGE>

EXHIBIT B

Selling Restrictions for Offers and
-----------------------------------
Sales outside the United States
-------------------------------

(1) (a) The Securities have not been and will not be registered
under the Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Each Initial Purchaser
represents and agrees that, except as otherwise permitted by Section 4(a)(i) or
(ii) of the Agreement to which this is an exhibit, it has offered and sold the
Securities, and will offer and sell the Securities, (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, each Initial
Purchaser represents and agrees that neither it, nor any of its affiliates nor
any person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and that it and they
have complied and will comply with the offering restrictions requirement of
Regulation S. Each Initial Purchaser agrees that, at or prior to the
confirmation of sale of Securities (other than a sale of Securities pursuant to
Section 4(a)(i) or (ii) of the Agreement to which this is an exhibit), it shall
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:

"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and March 31, 1997, except in either case in accordance
with Regulation S or Rule 144A under the Securities Act. Terms used
above have the meanings given to them by Regulation S."

(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its affiliates
or with the prior written consent of the Company.

(2) Each Initial Purchaser represents, warrants and agrees that (i) it
has not offered or sold, and will not offer or sell, any Securities to persons
in the United Kingdom, except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their business or in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulation 1995 (the
"Regulations"), (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom and the
Regulations with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on, and will only issue or pass on, to any person in the United
Kingdom any document received by it in connection with the issue of the
<PAGE>

Securities if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or is a person to whom the document may otherwise lawfully be issued or passed
on.

<PAGE>

EXHIBIT 4.4

QWEST COMMUNICATIONS INTERNATIONAL INC.,

Issuer

BANKERS TRUST COMPANY,

Trustee

____________________

Indenture

Dated as of ________, 1997

_____________________

$250,000,000

10 % Series B Senior Notes Due 2007

<PAGE>

TABLE OF CONTENTS

PAGE

PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . 1
Acquired Debt. . . . . . . . . . . . . . . . . . 2
Act. . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . 2
Agent Member . . . . . . . . . . . . . . . . . . 2
Asset Disposition. . . . . . . . . . . . . . . . 2
Attributable Value . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . 3
Capital Lease Obligation . . . . . . . . . . . . 3
Capital Stock. . . . . . . . . . . . . . . . . . 4
Cash Equivalents . . . . . . . . . . . . . . . . 4
Change of Control. . . . . . . . . . . . . . . . 4
Commission . . . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . 4
Company. . . . . . . . . . . . . . . . . . . . . 5
Company Order. . . . . . . . . . . . . . . . . . 5
Company Request. . . . . . . . . . . . . . . . . 5
Consolidated Capital Ratio . . . . . . . . . . . 5
Consolidated Cash Flow Available for
Fixed Charges. . . . . . . . . . . . . . . . .. 5
Consolidated Income Tax Expense. . . . . . . . . 5
Consolidated Interest Expense. . . . . . . . . . 5
Consolidated Net Income. . . . . . . . . . . . . 6
Consolidated Net Worth . . . . . . . . . . . . . 6
Consolidated Tangible Assets . . . . . . . . . . 6
Continuing Director. . . . . . . . . . . . . . . 7
Corporate Trust Office . . . . . . . . . . . . . 7
Corporation. . . . . . . . . . . . . . . . . . . 7
Credit Facilities. . . . . . . . . . . . . . . . 7
Debt . . . . . . . . . . . . . . . . . . . . . . 7
Debt Securities. . . . . . . . . . . . . . . . . 8
Default. . . . . . . . . . . . . . . . . . . . . 8
Defaulted Interest . . . . . . . . . . . . . . . 8
Depository . . . . . . . . . . . . . . . . . . . 8
Designation. . . . . . . . . . . . . . . . . . . 8
Designation Amount . . . . . . . . . . . . . . . 8
Disqualified Stock . . . . . . . . . . . . . . . 8
Eligible Institution . . . . . . . . . . . . . . 9
Eligible Receivables . . . . . . . . . . . . . . 9
Event of Default . . . . . . . . . . . . . . . . 9
Exchange Act . . . . . . . . . . . . . . . . . . 9
Exchange Securities. . . . . . . . . . . . . . . 9
Expiration Date. . . . . . . . . . . . . . . . . 9
__________________________

Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>

PAGE

Fair Market Value. . . . . . . . . . . . . . . . . 9
Federal Bankruptcy Code. . . . . . . . . . . . . . 9
Global Security. . . . . . . . . . . . . . . . . . 9
Government Securities. . . . . . . . . . . . . . . 9
Group. . . . . . . . . . . . . . . . . . . . . . . 9
Guarantee. . . . . . . . . . . . . . . . . . . . . 9
Guarantor. . . . . . . . . . . . . . . . . . . . . 10
Holder . . . . . . . . . . . . . . . . . . . . . . 10
Incur. . . . . . . . . . . . . . . . . . . . . . . 10
Indenture. . . . . . . . . . . . . . . . . . . . . 10
Indenture Obligations. . . . . . . . . . . . . . . 10
Initial Purchasers . . . . . . . . . . . . . . . . 10
Interest Payment Date. . . . . . . . . . . . . . . 11
Interest Rate or Currency Protection Agreement . . 11
Investment . . . . . . . . . . . . . . . . . . . . 11
Lien . . . . . . . . . . . . . . . . . . . . . . . 11
Maturity . . . . . . . . . . . . . . . . . . . . . 11
Net Available Proceeds . . . . . . . . . . . . . . 11
Notice of Default. . . . . . . . . . . . . . . . . 12
Offer. . . . . . . . . . . . . . . . . . . . . . . 12
Offer to Purchase. . . . . . . . . . . . . . . . . 12
Officers' Certificate. . . . . . . . . . . . . . . 14
Old Securities . . . . . . . . . . . . . . . . . . 14
Opinion of Counsel . . . . . . . . . . . . . . . . 14
Outstanding. . . . . . . . . . . . . . . . . . . . 14
Paying Agent . . . . . . . . . . . . . . . . . . . 15
Permitted Holders. . . . . . . . . . . . . . . . . 15
Permitted Interest Rate or Currency Protection
Agreement. . . . . . . . . . . . . . . . . . . . 16
Permitted Investments. . . . . . . . . . . . . . . 16
Permitted Joint Venture. . . . . . . . . . . . . . 16
Permitted Liens. . . . . . . . . . . . . . . . . . 16
Permitted Telecommunications Capital Asset
Disposition. . . . . . . . . . . . . . . . . . . 17
Person . . . . . . . . . . . . . . . . . . . . . . 17
Physical Security. . . . . . . . . . . . . . . . . 17
Predecessor Security . . . . . . . . . . . . . . . 17
Preferred Dividends. . . . . . . . . . . . . . . . 17
Preferred Stock. . . . . . . . . . . . . . . . . . 18
Private Placement Legend . . . . . . . . . . . . . 18
Public Equity Offering . . . . . . . . . . . . . . 18
Purchase Amount. . . . . . . . . . . . . . . . . . 18
Purchase Date. . . . . . . . . . . . . . . . . . . 18
Purchase Money Debt. . . . . . . . . . . . . . . . 18
Purchase Price . . . . . . . . . . . . . . . . . . 18
Rating Decline . . . . . . . . . . . . . . . . . . 18
Receivables. . . . . . . . . . . . . . . . . . . . 18
Receivables Sale . . . . . . . . . . . . . . . . . 18
Redemption Date. . . . . . . . . . . . . . . . . . 18
Redemption Price . . . . . . . . . . . . . . . . . 19
Regular Record Date. . . . . . . . . . . . . . . . 19
Related Person . . . . . . . . . . . . . . . . . . 19
Responsible Officer. . . . . . . . . . . . . . . . 19
Restricted Payment . . . . . . . . . . . . . . . . 19
Restricted Subsidiary. . . . . . . . . . . . . . . 19
Restricted Subsidiary Guarantee. . . . . . . . . . 19
Revocation . . . . . . . . . . . . . . . . . . . . 19
Sale and Leaseback Transaction . . . . . . . . . . 20
Securities . . . . . . . . . . . . . . . . . . . . 20
<PAGE>

iii

PAGE

Securities Act . . . . . . . . . . . . . . . . . 20
Security Register. . . . . . . . . . . . . . . . 20
Security Registrar . . . . . . . . . . . . . . . 20
Special Record Date. . . . . . . . . . . . . . . 20
Stated Maturity. . . . . . . . . . . . . . . . . 20
Strategic Investor . . . . . . . . . . . . . . . 20
Subordinated Debt. . . . . . . . . . . . . . . . 20
Subsidiary . . . . . . . . . . . . . . . . . . . 21
Telecommunications Assets. . . . . . . . . . . . 21
Telecommunications Business. . . . . . . . . . . 21
Trust Indenture Act. . . . . . . . . . . . . . . 21
TIA. . . . . . . . . . . . . . . . . . . . . . . 21
Trustee. . . . . . . . . . . . . . . . . . . . . 22
Unrestricted Subsidiary. . . . . . . . . . . . . 22
Vice President . . . . . . . . . . . . . . . . . 22
Voting Stock . . . . . . . . . . . . . . . . . . 22
Wholly Owned Subsidiary. . . . . . . . . . . . . 22
SECTION 102. Compliance Certificates and Opinions . . . . . . 22
SECTION 103. Form of Documents Delivered to Trustee . . . . . 23
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . 23
SECTION 105. Notices, etc., to Trustee and Company. . . . . . 25
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . 25
SECTION 107. Effect of Headings and Table of Contents . . . . 26
SECTION 108. Successors and Assigns . . . . . . . . . . . . . 26
SECTION 109. Separability Clause. . . . . . . . . . . . . . . 26
SECTION 110. Benefits of Indenture. . . . . . . . . . . . . . 26
SECTION 111. Governing Law. . . . . . . . . . . . . . . . . . 26
SECTION 112. Conflict with Trust Indenture Act. . . . . . . . 26
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . 27
SECTION 114. No Personal Liability of Directors, Officers,
Employees and Stockholders . . . . . . . . . . 27
SECTION 115. Independence of Covenants. . . . . . . . . . . . 27
SECTION 116. Exhibits . . . . . . . . . . . . . . . . . . . . 27
SECTION 117. Counterparts . . . . . . . . . . . . . . . . . . 27
SECTION 118. Duplicate Originals . . . . . . . . . . . . . . 28

ARTICLE TWO

SECURITY FORMS

SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . 28

ARTICLE THREE

THE SECURITIES

SECTION 301. Title and Terms. . . . . . . . . . . . . . . . . 28
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . 29
SECTION 303. Execution, Authentication, Delivery and Dating . 29
SECTION 304. Temporary Securities . . . . . . . . . . . . . . 31
SECTION 305. Registration, Registration of Transfer and
Exchange.........................................32
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.33
SECTION 307. Payment of Interest; Interest Rights Preserved...34
SECTION 308. Persons Deemed Owners . . . . . . . . . . . .....35
SECTION 309. Cancellation. . . . . . . . . . . . . . . . .....35
SECTION 310. Computation of Interest . . . . . . . . . . .....36
<PAGE>

PAGE

SECTION 311. CUSIP Number. . . . . . . . . . . . . . . . . . . 36
SECTION 312. Book-Entry Provisions for Global Securities. . .. 36
SECTION 313. [omitted] . . . . . . . . . . . . . . . . . . . . 37

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture . . . . . 40
SECTION 402. Application of Trust Money. . . . . . . . . . . . 41

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default . . . . . . . . . . . . . . . . 42
SECTION 502. Acceleration of Maturity; Rescission and
Annulment. . . . . . . . . . . . . . . . . . .. 43
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . . 45
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . 45
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities. . . . . . . . . . . . . . . . .. 46
SECTION 506. Application of Money Collected. . . . . . . . . . 46
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . 47
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . . . . 48
SECTION 509. Restoration of Rights and Remedies. . . . . . . . 48
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . 48
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . 48
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . 49
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . 49
SECTION 514. Waiver of Stay or Extension Laws. . . . . . . . . 49

ARTICLE SIX

THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities . . . . . . . 50
SECTION 602. Notice of Default . . . . . . . . . . . . . . . . 51
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . 51
SECTION 604. Trustee Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . . . . . .. 53
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . 53
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . 53
SECTION 607. Compensation and Reimbursement. . . . . . . . . . 53
SECTION 608. Corporate Trustee Required; Eligibility;
Conflicting Interests. . . . . . . . . . . . .. 54
SECTION 609. Resignation and Removal; Appointment
of Successor. . . . . . . . . . . . . . . . . . 55
SECTION 610. Acceptance of Appointment by Successor. . . . . . 56
SECTION 611. Merger, Conversion, Consolidation or Succession
to Business. . . . . . . . . . . . . . . . . .. 56

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Disclosure of Names and Addresses of Holders. . . 57
SECTION 702. Reports by Trustee. . . . . . . . . . . . . . . . 57
SECTION 703. Reports by Company. . . . . . . . . . . . . . . . 57
<PAGE>

PAGE
ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, etc., Only on Certain
Terms. . . . . . . . . . . . . . . . . . . . . ..58
SECTION 802. Successor Substituted . . . . . . . . . . . . . . .59

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of
Holders. . . . . . . . . . . . . . . . . . . . . 59
SECTION 902. Supplemental Indentures with Consent of
Holders. . . . . . . . . . . . . . . . . . . . ..60
SECTION 903. Execution of Supplemental Indentures. . . . . . . .61
SECTION 904. Effect of Supplemental Indentures . . . . . . . . .61
SECTION 905. Conformity with Trust Indenture Act . . . . . . . .61
SECTION 906. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . .61
SECTION 907. Notice of Supplemental Indentures . . . . . . . . .62

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium, if Any, and
Interest. . . . . . . . . . . . . . . . . . . . .62
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . .62
SECTION 1003. Money for Security Payments to Be Held in Trust. ..63
SECTION 1004. Corporate Existence . . . . . . . . . . . . . . . .64
SECTION 1005. Payment of Taxes and Other Claims . . . . . . . . .64
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . .65
SECTION 1007. Insurance . . . . . . . . . . . . . . . . . . . . .65
SECTION 1008. Provision of Financial Statements . . . . . . . . .65
SECTION 1009. Statement by Officers as to Default . . . . . . . .65
SECTION 1010. Purchase of Securities upon Change of Control. . ..66
SECTION 1011. Limitation on Consolidated Debt . . . . . . . . . .67
SECTION 1012. Limitation on Debt and Preferred Stock of
Restricted Subsidiaries. . . . . . . . . . . . ..69
SECTION 1013. Limitation on Restricted Payments . . . . . . . . .71
SECTION 1014. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries. .73
SECTION 1015. Limitation on Liens . . . . . . . . . . . . . . . .74
SECTION 1016. Limitation on Issuances of Certain Guarantees by,
and Debt Securities of, Restricted Subsidiaries..75
SECTION 1017. Limitation on Sale and Leaseback Transactions. . ..75
SECTION 1018. Limitation on Asset Dispositions. . . . . . . . . .75
SECTION 1019. Limitation on Issuances and Sales of Capital
Stock of Restricted Subsidiaries. . . . . . . . .76
SECTION 1020. Transactions with Affiliates and Related Persons. .77
SECTION 1021. Limitation on Designations of Unrestricted
Subsidiaries. . . . . . . . . . . . . . . . . . .77
SECTION 1022. No Repayment of Existing Parent Company
Advances with the Proceeds of the Securities. . .78
SECTION 1023. Waiver of Certain Covenants . . . . . . . . . . . .79
SECTION 1024. Trustee Not to Monitor Performance. . . . . . . . .79

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Right of Redemption . . . . . . . . . . . . . . . .79
<PAGE>

PAGE

SECTION 1102. Applicability of Article. . . . . . . . . . 79
SECTION 1103. Election to Redeem; Notice to Trustee . . . 79
SECTION 1104. Selection by Trustee of Securities to Be
Redeemed. . . . . . . . . . . . . . . . . 80
SECTION 1105. Notice of Redemption. . . . . . . . . . . . 80
SECTION 1106. Deposit of Redemption Price . . . . . . . . 81
SECTION 1107. Securities Payable on Redemption Date . . . 81
SECTION 1108. Securities Redeemed in Part . . . . . . . . 81

ARTICLE TWELVE

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1201. Company's Option to Effect Defeasance or
Covenant Defeasance. . . . . . . . . . .. 82
SECTION 1202. Defeasance and Discharge. . . . . . . . . . 82
SECTION 1203. Covenant Defeasance . . . . . . . . . . . . 83
SECTION 1204. Conditions to Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . 83
SECTION 1205. Deposited Money and Government Securities to
Be Held in Trust; Other Miscellaneous
Provisions . . . . . . . . . . . . . . .. 84
SECTION 1206. Reinstatement . . . . . . . . . . . . . . . 85

TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . 86

SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . 86

EXHIBIT A - Form of Security

QWEST COMMUNICATIONS INTERNATIONAL INC.

RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND THIS INDENTURE

TRUST INDENTURE
ACT SECTION INDENTURE
Section

(S) 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . 608
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 608
(a)(3) . . . . . . . . . . . . . . . . . . . . . . N/A
(a)(4) . . . . . . . . . . . . . . . . . . . . . . N/A
(b) . . . . . . . . . . . . . . . . . . . . . . 608(b)
(S) 311(a) . . . . . . . . . . . . . . . . . . . . . . 605
(b) . . . . . . . . . . . . . . . . . . . . . . 605
(S) 312(a) . . . . . . . . . . . . . . . . . . . . . . 701
(b) . . . . . . . . . . . . . . . . . . . . . . 701
(c) . . . . . . . . . . . . . . . . . . . . . . 701
__________________________

Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE>

vii

(S) 313(a) . . . . . . . . . . . . . . . . . . . . . . 702
(a)(4) . . . . . . . . . . . . . . . . . . . . . . 702
(b) . . . . . . . . . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . . . . . . . . . 702
(d) . . . . . . . . . . . . . . . . . . . . . . 702
(S) 314(a) . . . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . . N/A
(c)(1) . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . N/A
(d) . . . . . . . . . . . . . . . . . . . . . . N/A
(e) . . . . . . . . . . . . . . . . . . . . . . 102
(S) 315(a) . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . 601
(c) . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . 601
(S) 316(a)(last
sentence). . . . . . . . . . . . . . . . . . . . . . 101("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . N/A
(b) . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . 104(d)
(S) 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . 1003
(S) 318(a) . . . . . . . . . . . . . . . . . . . . . . 111

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>

INDENTURE, dated as of ______, 1997 between Qwest Communications
International Inc., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal office
at 555 Seventeenth Street, Denver, Colorado 80202, and Bankers Trust Company, a
New York banking corporation, as Trustee (herein called the "Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue of 10 %
Series B Senior Notes Due 2007 (herein called the "Exchange Securities"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture. The Exchange Securities are being issued in connection with an offer
by the Company to exchange its 10 % Senior Notes Due 2007 (herein called the
"Old Securities") for the Exchange Securities. The Exchange Securities and the
Old Securities are considered collectively to be a single class for all
purposes under this Indenture, including, without limitation, waivers,
amendments, redemptions and Offers to Purchase, and are referred to collectively
as the "Securities."

All things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of each of the Company and the Trustee, in
accordance with their and its terms.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

(a) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;

(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under the
Trust Indenture Act;

(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation;

1
<PAGE>

(d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section, paragraph or other subdivision; and

(e) unless otherwise indicated, references to Articles, Sections,
paragraphs or other subdivisions are references to such Articles,
Sections, paragraphs or other subdivisions of this Indenture.

"Acquired Debt" means, with respect to any specified Person, (i)
Debt of any other Person existing at the time such Person merges with or into or
consolidates with or becomes a Subsidiary of such specified Person and (ii) Debt
secured by a Lien encumbering any asset acquired by such specified Person, which
Debt was not incurred in anticipation of, and was outstanding prior to, such
merger, consolidation or acquisition.

"Act", when used with respect to any Holder, has the meaning
specified in Section 104.

"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

"Agent Member" has the meaning specified in Section 312.

"Asset Disposition" means any transfer, conveyance, sale, lease or
other disposition by the Company or any Restricted Subsidiary in one or more
related transactions occurring within any 12-month period (including a
consolidation or merger or other sale of any such Restricted Subsidiary with,
into or to another Person in a transaction in which such Restricted Subsidiary
ceases to be a Restricted Subsidiary of the Company, but excluding a disposition
by a Restricted Subsidiary to the Company or a Restricted Subsidiary or by the
Company to a Restricted Subsidiary) of (i) shares of Capital Stock or other
ownership interests of a Restricted Subsidiary (other than as permitted by
clauses (iii), (iv) and (v) of Section 1019), (ii) substantially all of the
assets of the Company or any Restricted Subsidiary representing a division or
line of business or (iii) other assets or rights of the Company or any
Restricted Subsidiary outside of the ordinary course of business (excluding any
transfer, conveyance, sale, lease or other disposition of equipment that is
obsolete or no longer used by or useful to the Company, provided that the
Company has delivered to the Trustee an Officers' Certificate stating that such
criteria are satisfied); provided in each case that the aggregate consideration
for such transfer, conveyance, sale, lease or other disposition is equal to
$500,000 or more in any 12-month period and provided further that the following
shall not be Asset Dispositions: (x) Permitted Telecommunications Capital Asset
Dispositions, (y) exchanges of Telecommunications Assets for other
Telecommunications Assets where the Fair Market Value of the Telecommunications
Assets received is at least equal to the Fair Market Value of the
Telecommunications Assets disposed of or, if less, the difference is received in
cash and such cash is Net Available Proceeds and (z) Liens permitted to be
Incurred pursuant to the second paragraph of Section 1015.

2
<PAGE>

date of determination at a rate per annum equal to the discount rate which would
be applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period shall be the aggregate amount of
rent payable by the lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of any lease which
is terminable by the lessee upon the payment of penalty, such net amount shall
also include the lesser of the amount of such penalty (in which case no rent
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated) or the rent which would otherwise
be required to be paid if such lease is not so terminated. "Attributable Value"
means, as to a Capital Lease Obligation, the principal amount thereof.

"Board of Directors" means the board of directors of the Company.

"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.

"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with generally accepted
accounting principles (a "Capital Lease"). The stated maturity of such
obligation shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty. The principal amount of such
obligation shall be the capitalized amount thereof that would appear on the face
of a balance sheet of such Person in accordance with generally accepted
accounting principles.

"Cash Equivalents" means (i) any Debt with a maturity of 365 days or
less issued or directly and fully guaranteed as insured by the United States or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof or such Debt constitutes a
general obligation of such country); (ii) deposits, certificates of deposit or
acceptances with a maturity of 365 days or less of any financial institution
that is a member of the Federal Reserve System, in each case having combined
capital and surplus and undivided profits (or any similar capital concept) of
not less than $500 million and whose senior unsecured debt is rated at least
"A-1" by Standard & Poor's Ratings Services or "P-1" by Moody's Investors
Service, Inc.; (iii) commercial paper with a maturity of 365 days or less issued
by a Corporation (other than an Affiliate of the Company) organized under the
laws of the United States or any state thereof and rated at least
"A-1" by Standard & Poor's Ratings Services or "P-1" by Moody's Investors
Service, Inc.; and (iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States or issued by any agency or instrumentality thereof and
backed by the full

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faith and credit of the United States maturing within 365 days from the date of
acquisition.

"Change of Control" has the meaning specified in Section 1010.

"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after March 31, 1997 such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.

"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

"Company Order" or "Company Request" means a written request or
order signed in the name of the Company by the Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, the President or a Vice
President, and by the Chief Financial Officer, the Chief Accounting Officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee.

"Consolidated Capital Ratio" of any Person as of any date means the
ratio of (i) the aggregate consolidated principal amount of Debt of such Person
then outstanding to (ii) the greater of either (a) the aggregate consolidated
paid-in capital of such Person as of such date or (b) the stockholders' equity
as of such date as shown on the consolidated balance sheet of such Person in
accordance with generally accepted accounting principles.

"Consolidated Cash Flow Available for Fixed Charges" for any period
means the Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period increased by the sum of (i) Consolidated Interest Expense of the
Company and its Restricted Subsidiaries for such period, plus (ii) Consolidated
Income Tax Expense of the Company and its Subsidiaries for such period, plus
(iii) the consolidated depreciation and amortization expense or other non-cash
write-offs of assets included in the income statement of the Company and its
Restricted Subsidiaries for such period, plus (iv) any charge related to any
premium or penalty paid in connection with redeeming or retiring any Debt prior
to its stated maturity; provided, however, that there shall be excluded
therefrom the Consolidated Cash Flow Available for Fixed Charges (if positive)
of any Restricted Subsidiary (calculated separately for such Restricted
Subsidiary in the same manner as provided above for the Company) that is subject
to a restriction which prevents the payment of dividends or the making of
distributions to the Company or another Restricted Subsidiary to the extent of
such restriction.

"Consolidated Income Tax Expense" for any period means the aggregate
amounts of the provisions for income taxes of the Company and its Subsidiaries
for such period calculated on a consolidated basis in accordance with generally
accepted accounting principles.

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duplication (or, to the extent not so included, with the addition of), (i) the
amortization of Debt discounts; (ii) any payments or fees with respect to
letters of credit, bankers' acceptances or similar facilities; (iii) fees with
respect to interest rate swap or similar agreements or foreign currency hedge,
exchange or similar agreements; (iv) Preferred Stock dividends of the Company
and its Subsidiaries (other than dividends paid in shares of Preferred Stock
that is not Disqualified Stock) declared and paid or payable; (v) accrued
Disqualified Stock dividends of the Company and its Restricted Subsidiaries,
whether or not declared or paid; (vi) interest on Debt guaranteed by the Company
and its Restricted Subsidiaries; and (vii) the portion of any Capital Lease
Obligation paid during such period that is allocable to interest expense.

"Consolidated Net Income" for any period means the net income (or
loss) of the Company and its Restricted Subsidiaries for such period determined
on a consolidated basis in accordance with generally accepted accounting
principles; provided that there shall be excluded therefrom (a) the net income
(or loss) of any Person acquired by the Company or a Restricted Subsidiary in a
pooling-of-interests transaction for any period prior to the date of such
transaction, (b) the net income (or loss) of any Person that is not a Restricted
Subsidiary except to the extent of the amount of dividends or other
distributions actually paid to the Company or a Restricted Subsidiary by such
Person during such period, (c) gains or losses on Asset Dispositions by the
Company or its Restricted Subsidiaries, (d) all extraordinary gains and
extraordinary losses, determined in accordance with generally accepted
accounting principles, (e) the cumulative effect of changes in accounting
principles, (f) non-cash gains or losses resulting from fluctuations in currency
exchange rates, (g) any non-cash expense related to the issuance to employees or
directors of the Company or any Restricted Subsidiary or any Affiliate of the
Company of (i) options to purchase Capital Stock of the Company or such
Restricted Subsidiary or (ii) other compensatory rights (including under the
Company's Growth Share Plan), provided, in either case, that such options or
rights, by their terms, can be redeemed only for Capital Stock, (h) with respect
to a Restricted Subsidiary that is not a Wholly Owned Subsidiary, any aggregate
net income (or loss) in excess of the Company's or any Restricted Subsidiary's
pro rata share of the net income (or loss) of such Restricted Subsidiary that is
not a Wholly Owned Subsidiary shall be excluded and (i) the tax effect of any of
the items described in clauses (a) through (h) above; provided further that for
purposes of any determination pursuant to Section 1013, there shall further be
excluded therefrom the net income (but not net loss) of any Restricted
Subsidiary that is subject to a restriction which prevents the payment of
dividends or the making of distributions to the Company or another Restricted
Subsidiary to the extent of such restriction.

"Consolidated Net Worth" of any Person means the stockholders'
equity of such Person, determined on a consolidated basis in accordance with
generally accepted accounting principles, less amounts attributable to
Disqualified Stock of such Person; provided that, with respect to the Company,
adjustments following March 31, 1997 to the accounting books and records of the
Company in accordance with Accounting Principles Board Opinions Nos. 16 and 17
(or successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person shall not be given effect to.

"Consolidated Tangible Assets" of any Person means the total amount
of assets (less applicable reserves and other properly deductible items) which
under generally accepted accounting principles would be included on a
consolidated balance sheet of such Person and its Subsidiaries after deducting
therefrom all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such consolidated
balance sheet.

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<PAGE>

"Continuing Director" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on March 31, 1997 or (ii) was nominated for election or elected to the Board of
Directors with the affirmative vote of a majority of the Continuing Directors
who were members of the Board of Directors at the time of such nomination or
election or the affirmative vote of Permitted Holders.

"Corporate Trust Office" means the principal corporate trust office
of the Trustee, at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this Indenture
is located at Four Albany Street, New York, New York 10006, except that, with
respect to presentation of Securities for payment or for registration of
transfer or exchange, such term shall mean the office or agency of the Trustee
at which, at any particular time, its corporate agency business shall be
conducted.

"Corporation" includes corporations, associations, companies and
business trusts.

"Credit Facilities" means one or more credit agreements, loan
agreements or similar facilities, secured or unsecured, entered into from time
to time by the Company and its Restricted Subsidiaries, and including any
related notes, Guarantees, collateral documents, instruments and agreements
executed in connection therewith, as the same may be amended, supplemented,
modified, restated or replaced from time to time.

"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (including securities repurchase agreements but
excluding trade accounts payable or accrued liabilities arising in the ordinary
course of business), (v) every Capital Lease Obligation of such Person, (vi) all
Receivables Sales of such Person, together with any obligation of such Person to
pay any discount, interest, fees, indemnities, penalties, recourse, expenses or
other amounts in connection therewith, (vii) all obligations to redeem
Disqualified Stock issued by such Person, (viii) every obligation under Interest
Rate and Currency Protection Agreements of such Person and (ix) every obligation
of the type referred to in clauses (i) through (viii) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has Guaranteed. The "amount" or "principal amount" of Debt at any time of
determination as used herein represented by (a) any Debt issued at a price that
is less than the principal amount at maturity thereof shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (b) any Receivables Sale shall be the amount of the
unrecovered capital or principal investment of the purchaser (other than the
Company or a Wholly Owned Subsidiary of the Company) thereof, excluding amounts
representative of yield or interest earned on such investment, or (c) any
Disqualified Stock shall be the maximum fixed redemption or repurchase price in
respect thereof.

"Debt Securities" means any debt securities (including any guarantee
of such securities) issued by the Company or any Restricted Subsidiary of the
Company in connection with a public offering or a private placement (excluding
Debt permitted to be Incurred pursuant to paragraph (b) of Section 1011).

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<PAGE>

"Default" means any event, act or condition the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.

"Defaulted Interest" has the meaning specified in Section 307.

"Depository" means The Depository Trust Company, its nominees and
successors.

"Designation" and "Designation Amount" have the respective meanings
specified in Section 1021.

"Disqualified Stock" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of such Person, any
Subsidiary of such Person or the holder thereof, in whole or in part, on or
prior to the final Stated Maturity of the Securities, provided, however, that
any Preferred Stock which would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require the Company to
repurchase or redeem such Preferred Stock upon the occurrence of a Change of
Control occurring prior to the final Stated Maturity of the Securities shall not
constitute Disqualified Stock if the change of control provisions applicable to
such Preferred Stock are no more favorable to the holders of such Preferred
Stock than the provisions applicable to the Securities contained in Section 1010
and such Preferred Stock specifically provides that the Company shall not
repurchase or redeem any such stock pursuant to such provisions prior to the
Company's repurchase of such Securities as are required to be repurchased
pursuant to Section 1010.

"Eligible Institution" means a commercial banking institution that
has combined capital and surplus of not less than $500 million or its equivalent
in foreign currency, whose debt is rated "A" (or higher) according to Standard &
Poor's Ratings Services or Moody's Investors Service, Inc. at the time as of
which any investment or rollover therein is made.

"Eligible Receivables" means, at any time, Receivables of the
Company and its Restricted Subsidiaries, as evidenced on the most recent
quarterly consolidated balance sheet of the Company as at a date at least 45
days prior to such time, less Receivables of the Company or any Restricted
Subsidiary employed to secure Debt Incurred pursuant to clause (vii) of
paragraph (b) of Section 1011.

"Event of Default" has the meaning specified in Section 501.

"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act), and the rules and regulations thereunder (or respective
successors thereto).

"Exchange Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.

"Expiration Date" has the meaning specified in "Offer to Purchase"
below.

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<PAGE>

determined by the Board of Directors acting in good faith and shall be evidenced
by a Board Resolution.

"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of
the United States Code, as amended from time to time.

"Global Security" has the meaning specified in Section 303.

"Group" has the meaning specified in Section 1010.

"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Debt, (ii) to
purchase property, securities or services for the purpose of assuring the holder
of such Debt of the payment of such Debt or (iii) to maintain working capital,
equity capital or other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Debt (and
"Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings correlative to
the foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.

"Guarantor" means a Restricted Subsidiary of the Company that has
executed a Restricted Subsidiary Guarantee.

"Holder" means a Person in whose name a Security is registered in
the Security Register.

"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
including by acquisition of Subsidiaries or the recording, as required pursuant
to generally accepted accounting principles or otherwise, of any such Debt or
other obligation on the balance sheet of such Person (and "Incurrence",
"Incurred", "Incurrable" and "Incurring" shall have meanings correlative to the
foregoing); provided, however, that a change in generally accepted accounting
principles that results in an obligation of such Person that exists at such time
becoming Debt shall not be deemed an Incurrence of such Debt and that neither
the accrual of interest nor the accretion of original issue discount shall be
deemed an Incurrence of Debt.

"Indenture" means this instrument as originally executed and as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.

"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities to pay principal of,
premium, if any, and interest on the Securities when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture or the Securities and the performance of all other obligations to the

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<PAGE>

Trustee (including, but not limited to, payment of all amounts due the Trustee
under Section 607), Paying Agent, Security Registrar and the Holders of the
Securities under this Indenture and the Securities according to the terms
thereof.

"Initial Purchasers" means Salomon Brothers Inc, Donaldson, Lufkin &
Jenrette Securities Corporation and Goldman, Sachs & Co.

"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities.

"Interest Rate or Currency Protection Agreement" of any Person means
any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.

"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) to, or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, any other Person, including any payment on a
Guarantee of any obligation of such other Person.

"Lien" means, with respect to any property or assets, any mortgage
or deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness), encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including, without limitation,
any conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing). For purposes of this definition
the sale, lease, conveyance or other transfer by the Company or any Subsidiary
of, including the grant of indefeasible rights of use or equivalent arrangements
with respect to, dark or lit communications fiber capacity or communications
conduit shall not constitute a Lien.

"Maturity", when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, notice of redemption or otherwise.

"Net Available Proceeds" from any Asset Disposition by any Person
means cash or cash equivalents received (including amounts received by way of
sale or discounting of any note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Debt or other obligations relating to such properties or assets)
therefrom by such Person, net of (i) any portion thereof invested within 360
days of such Asset Disposition in Telecommunications Assets, (ii) all legal,
title and recording tax expenses, commissions and other fees and expenses
Incurred and all federal, state, provincial, foreign and local taxes required to
be accrued as a liability as a consequence of such Asset Disposition, (iii) all
payments made by such Person or its Subsidiaries on any Debt which is secured by
such assets in accordance with the terms of any Lien upon or with respect to
such assets or which must by the terms of such Lien, or in order to obtain a
necessary consent to such Asset Disposition or by applicable law, be repaid out
of the proceeds from such Asset Disposition, (iv) all distributions and other
payments made to minority interest holders in Subsidiaries of such Person or
Permitted Joint Ventures as a result of such Asset Disposition and (v)
appropriate amounts to be provided by such Person or any Subsidiary thereof, as

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<PAGE>

the case may be, as a reserve in accordance with generally accepted accounting
principles against any liabilities associated with such assets and retained by
such Person or any Subsidiary thereof, as the case may be, after such Asset
Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Disposition, in each case as determined by the Board
of Directors of such Person, in its reasonable good faith judgment evidenced by
Board Resolution; provided, however, that any reduction in such reserve within
twelve months following the consummation of such Asset Disposition shall be for
all purposes of this Indenture and the Securities treated as a new Asset
Disposition at the time of such reduction with Net Available Proceeds equal to
the amount of such reduction.

"Notice of Default" has the meaning specified in Section 501.

"Offer" has the meaning specified in "Offer to Purchase" below.

"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder of Securities at
his address appearing in the Security Register on the date of the Offer offering
to purchase up to the total aggregate principal amount of Securities specified
in such Offer at the purchase price specified in such Offer (as determined
pursuant to Section 1010). Unless otherwise required by applicable law, the
Offer shall specify an expiration date (the "Expiration Date") of the Offer to
Purchase which shall be, subject to any contrary requirements of applicable law,
not less than 30 days or more than 60 days after the date of such Offer and a
settlement date (the "Purchase Date") for purchase of Securities within five
Business Days after the Expiration Date. The Company shall notify the Trustee
at least 15 Business Days (or such shorter period as is acceptable to the
Trustee) prior to the mailing of the Offer of the Company's obligation to make
an Offer to Purchase, and the Offer shall be mailed by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
The Offer shall contain information concerning the business of the Company and
its Subsidiaries which the Company in good faith believes will enable such
Holders to make an informed decision with respect to the Offer to Purchase
(which at a minimum will include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the documents required to be
filed with the Trustee pursuant to Section 1008 (which requirements may be
satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the Offer
to Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to make
the Offer to Purchase and (iv) any other information required by applicable law
to be included therein). The Offer shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Offer to
Purchase. The Offer shall also state:

(a) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;

(b) the Expiration Date and the Purchase Date;

(c) the aggregate principal amount of the Outstanding Securities
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such has been
determined pursuant to the Section hereof requiring the Offer to Purchase)
(the "Purchase Amount");

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<PAGE>

(d) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Securities accepted for payment (as
specified pursuant to Section 1010) (the "Purchase Price");

(e) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion of a
Security tendered must be tendered in an integral multiple of $1,000
principal amount;

(f) the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase;

(g) that any Securities not tendered or tendered but not purchased
by the Company will continue to accrue interest, as the case may be;

(h) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to the
Offer to Purchase and that interest thereon, if any, shall cease to accrue
on and after the Purchase Date;

(i) that each Holder electing to tender a Security pursuant to the
Offer to Purchase will be required to surrender such Security at the place
or places specified in the Offer prior to the close of business on the
Expiration Date (such Security being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or its attorney duly authorized in writing);

(j) that Holders will be entitled to withdraw all or any portion
of Securities tendered if the Company (or their Paying Agent) receives,
not later than the close of business on the Expiration Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder tendered, the
certificate number of the Security the Holder tendered and a statement
that such Holder is withdrawing all or a portion of its tender;

(k) that (i) if Securities in an aggregate principal amount less
than or equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Securities and (ii) if Securities in an aggregate principal amount in
excess of the Purchase Amount are tendered and not withdrawn pursuant to
the Offer to Purchase, the Company shall purchase Securities having an
aggregate principal amount equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deemed appropriate so that only
Securities in denominations of $1,000 or integral multiples thereof shall
be purchased); and

(l) that in the case of any Holder whose Security is purchased
only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unpurchased portion of the Security so tendered.

Any Offer to Purchase shall be governed by and effected in accordance with the
Offer for such Offer to Purchase.

"Officers' Certificate" means a certificate signed by the Chairman
of the Board of Directors, a Vice Chairman of the Board of Directors, the
President or a Vice President, and by the Chief Financial Officer, the Chief

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<PAGE>

Accounting Officer, the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee.

"Opinion of Counsel" means an opinion of counsel acceptable to the
Trustee (who may be counsel to the Company, including an employee of the
Company).

"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

(i) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;

(ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities; provided
that, if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture;

(iii) Securities, except to the extent provided in Sections 1202 and
1203, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Twelve; and

(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands the Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which any
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or such other obligor.

"Old Securities" has the meaning stated in the first recital of this
Indenture.

"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (and premium, if
any) or interest on any Securities on behalf of the Company.

12
<PAGE>

Persons who were beneficial owners (within the meaning of Rule 13d-3 under the
Exchange Act) of such Person on March 31, 1997 continued to be beneficial owners
(within the meaning of Rule 13d-3 under the Exchange Act) at the time of
formation of such Affiliate.

"Permitted Interest Rate or Currency Protection Agreement" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.

"Permitted Investments" means (a) Cash Equivalents; (b) Investments
in prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits;
(c) loans, advances or extensions of credit to employees and directors made in
the ordinary course of business and consistent with past practice; (d)
obligations under Interest Rate or Currency Protection Agreements; (e) bonds,
notes, debentures and other securities received as a result of Asset
Dispositions pursuant to and in compliance with Section 1018; (f) Investments
made in the ordinary course of business as partial payment for constructing a
network relating to a Telecommunications Business; (g) commercially reasonable
extensions of trade credit; (h) Investments in any Person as a result of which
such Person becomes a Restricted Subsidiary; (i) Investments in Permitted Joint
Ventures in an aggregate amount not to exceed $25 million; (j) Investments in
Affiliates or Related Persons in an aggregate amount not to exceed $11 million,
provided that the making of such Investments is permitted pursuant to
Section 1020; and (k) Investments in an aggregate amount not to exceed $15
million consisting of the contribution by the Company or any Restricted
Subsidiary of assets located in Mexico to joint ventures in which the Company or
a Restricted Subsidiary has an interest.

"Permitted Joint Venture" means a Corporation, partnership or other
entity other than a Restricted Subsidiary engaged in one or more
Telecommunications Businesses over which the Company and/or one or more
Strategic Investors have, directly or indirectly, the power to direct the
policies, management and affairs.

"Permitted Liens" means (a) Liens for taxes, assessments,
governmental charges, levies or claims which are not yet delinquent or which are
being contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with generally
accepted accounting principles shall have been made therefor; (b) other Liens
incidental to the conduct of the Company's and its Restricted Subsidiaries'
business or the ownership of its property and assets not securing any Debt, and
which do not in the aggregate materially detract from the value of the Company's
and its Restricted Subsidiaries' property or assets when taken as a whole, or
materially impair the use thereof in the operation of its business; (c) Liens
with respect to assets of a Restricted Subsidiary granted by such Restricted
Subsidiary to the Company or a Restricted Subsidiary to secure Debt owing to the
Company or such Restricted Subsidiary; (d) Liens, pledges and deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of statutory obligations; (e) Liens,
pledges or deposits made to secure the performance of tenders, bids, leases,
public or statutory obligations, sureties, stays, appeals, indemnities,
performance or other similar bonds and other obligations of like nature Incurred
in the ordinary course of business (exclusive of obligations for the payment of
borrowed money); (f) zoning restrictions, servitudes, easements, rights-of-way,
restrictions and other similar charges or encumbrances Incurred in the ordinary
course of business which, in the aggregate, do not materially detract from the

13
<PAGE>

value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the Company or its Restricted Subsidiaries; (g) Liens
arising out of judgments or awards against or other court proceedings concerning
the Company or any Restricted Subsidiary with respect to which the Company or
such Restricted Subsidiary is prosecuting an appeal or proceeding for review and
the Company or such Restricted Subsidiary is maintaining adequate reserves in
accordance with generally accepted accounting principles; and (h) any interest
or title of a lessor in the property subject to any lease other than a Capital
Lease.

"Permitted Telecommunications Capital Asset Disposition" means the
transfer, conveyance, sale, lease or other disposition of a capital asset that
is a Telecommunications Asset (including fiber, conduit and related equipment)
(i) the proceeds of which are treated as revenues by the Company in accordance
with generally accepted accounting principles and (ii) that, in the case of the
sale of fiber, would not result in the Company retaining less than 24 fibers per
route mile on any segment of the Company's network.

"Person" means any individual, Corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
government or agency or political subdivision thereof or any other entity.

"Physical Security" has the meaning specified in Section 303.

"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for a
mutilated security or in lieu of a lost, destroyed or stolen Security shall be
deemed to evidence the same debt as the mutilated, lost, destroyed or stolen
Security.

"Preferred Dividends" for any Person means for any period the
quotient determined by dividing the amount of dividends and distributions paid
or accrued (whether or not declared) on Preferred Stock of such Person during
such period calculated in accordance with generally accepted accounting
principles, by 1 minus the maximum statutory income tax rate then applicable to
the Company (expressed as a decimal).

"Preferred Stock" of any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.

"Private Placement Legend" means the third paragraph of the legend
set forth in the Securities in the form set forth in Exhibit A.

"Public Equity Offering" means an underwritten public offering of
common stock made on a primary basis by the Company pursuant to a registration
statement filed with, and declared effective by, the Commission in accordance
with the Securities Act.

"Purchase Amount" has the meaning specified in "Offer to Purchase"
above.

"Purchase Date" has the meaning specified in "Offer to Purchase"
above.

"Purchase Money Debt" means Debt Incurred at any time within 270
days of, and for the purposes of financing all or any part of the cost of, the

14
<PAGE>

construction, installation, acquisition or improvement by the Company or any
Restricted Subsidiary of the Company of any new Telecommunications Assets
constructed, installed, acquired or improved after March 31, 1997, provided that
the proceeds of such Debt are expended for such purposes within such 270-day
period.

"Purchase Price" has the meaning specified in "Offer to Purchase"
above.

"Rating Decline" means the Securities cease to be rated B+ (or the
equivalent thereof) or better by Standard & Poor's Ratings Services or B2 (or
the equivalent thereof) or better by Moody's Investors Service, Inc.

"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of
money, excluding allowances for doubtful accounts.

"Receivables Sale" of any Person means any sale of Receivables of
such Person (pursuant to a purchase facility or otherwise), other than in
connection with a disposition of the business operations of such Person relating
thereto or a disposition of defaulted Receivables for purposes of collection and
not as a financing arrangement.

"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.

"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

"Regular Record Date" for the interest payable on any Interest
Payment Date means the September 15 or March 15 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.

"Related Person" of any Person means any other Person directly or
indirectly owning (a) 5% or more of the outstanding Common Stock of such Person
(or, in the case of a Person that is not a Corporation, 5% or more of the
outstanding equity interest in such Person) or (b) 5% or more of the combined
outstanding voting power of the Voting Stock of such Person.

"Responsible Officer", when used with respect to the Trustee, means
any officer within the Trustee's Corporate Trust Office, including any vice
president, the Managing Director, the secretary, any assistant secretary, any
assistant treasurer, or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers,
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

"Restricted Payment" has the meaning specified in Section 1013.

"Restricted Subsidiary" means a Subsidiary of the Company, or of a
Restricted Subsidiary that is a Wholly Owned Subsidiary of the Company, that has
not been designated by the Board of Directors (by a Board Resolution) as an
Unrestricted Subsidiary pursuant to and in compliance with Section 1021.

"Restricted Subsidiary Guarantee" means a supplemental indenture to
this Indenture, in form satisfactory to the Trustee, executed in accordance with
Article Nine, providing for an unconditional Guarantee of payment in full of the
principal of, premium, if any, and interest on the Securities. Any such

15
<PAGE>

Restricted Subsidiary Guarantee shall not be subordinate in right of payment to
any Debt of the Restricted Subsidiary providing the Restricted Subsidiary
Guarantee.

"Revocation" has the meaning specified in Section 1021.

"Sale and Leaseback Transaction" of any Person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or asset of such Person
which has been or is being sold or transferred by such Person more than 365 days
after the acquisition thereof or the completion of construction or commencement
of operation thereof to such lender or investor or to any Person to whom funds
have been or are to be advanced by such lender or investor on the security of
such property or asset. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be terminated by the
lessee without payment of a penalty.

"Securities" has the meaning stated in the first recital of this
Indenture.

"Securities Act" means the Securities Act of 1933, as amended.

"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.

"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.

"Strategic Investor" means a Corporation, partnership or other
entity engaged in one or more Telecommunications Businesses that has, or 80% or
more of the Voting Stock of which is owned by a Person that has, an equity
market capitalization, at the time of its initial Investment in the Company or
in a Permitted Joint Venture with the Company, in excess of $2 billion.

16
<PAGE>

an offer to purchase made by the Company) of such other Debt at the option of
the holder thereof prior to the final Stated Maturity of the Securities, other
than a redemption or other retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase made by the Company) which is
conditioned upon a change of control of the Company pursuant to provisions
substantially similar to those described in Section 1010 (and which shall
provide that such Debt shall not be repurchased pursuant to such provisions
prior to the Company's repurchase of the Securities required to be repurchased
by the Company pursuant to the provisions of Section 1010).

"Subsidiary" of any Person means (i) a Corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a Corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.

"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.

"Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice, data
or video through owned or leased transmission facilities, (ii) constructing,
creating, developing or marketing communications related network equipment,
software and other devices for use in a telecommunications business or
(iii) evaluating, participating or pursuing any other activity or opportunity
that is primarily related to those identified in (i) or (ii) above, provided
that the determination of what constitutes a Telecommunications Business shall
be made in good faith by the Board of Directors.

"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.

"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.

"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 1021.

"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".

"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only for
so long as no senior class of securities has such voting power by reason of any
contingency.

"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Voting Stock or other ownership interests (other
than directors' qualifying shares) of which shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.

17
<PAGE>

SECTION 102. Compliance Certificates and Opinions.
------------------------------------

Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1009(a)) shall include:

(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------

In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated (with
proper identification of each matter covered therein) and form one instrument.

18
<PAGE>

SECTION 104. Acts of Holders.
---------------

(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.

(c) The principal amount and serial numbers of Securities held by
any Person, and the date of holding the same, shall be proved by the Security
Register.

(d) If the Company shall solicit from the Holders of Securities
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to a Board Resolution, fix
in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.

(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.

19
<PAGE>

SECTION 105. Notices, etc., to Trustee and Company.
-------------------------------------

Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Market Services, or

(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified
in the first paragraph of this Indenture, or at any other address
previously furnished in writing to the Trustee by the Company.

SECTION 106. Notice to Holders; Waiver.
-------------------------

Where this Indenture provides for notice of any event to Holders by
the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at the address of such
Holder as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice. Where this Indenture provides
for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.

SECTION 107. Effect of Headings and Table of Contents.
----------------------------------------

The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.

SECTION 108. Successors and Assigns.
----------------------

All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

SECTION 109. Separability Clause.
-------------------

In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

20
<PAGE>

SECTION 110. Benefits of Indenture.
---------------------

Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Security Registrar and their successors hereunder and the Holders any legal or
equitable right, remedy or claim under this Indenture.

SECTION 111. Governing Law.
-------------

This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York.

SECTION 112. Conflict with Trust Indenture Act.
---------------------------------

The Trust Indenture Act shall apply as a matter of contract to this
Indenture for purposes of interpretation, construction and defining the rights
and obligations hereunder. If any provision hereof limits, qualifies or
conflicts with any provision of the Trust Indenture Act or another provision
which is required or deemed to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such provision or requirement of the
Trust Indenture Act shall control.

If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.

SECTION 113. Legal Holidays.
--------------

In any case where any Interest Payment Date, Redemption Date, or
Stated Maturity or Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal (or premium, if any) or interest need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date or at the
Stated Maturity or Maturity; provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Stated
Maturity or Maturity, as the case may be.

SECTION 114. No Personal Liability of Directors, Officers,
--------------------------------------------
Employees and Stockholders.
- --------------------------

No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation, solely by reason of its
status as a director, officer, employee, incorporator or stockholder of the
Company. By accepting a Security, each Holder waives and releases all such
liability (but only such liability). The waiver and release are part of the
consideration for issuance of the Securities.

SECTION 115. Independence of Covenants.
-------------------------

All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.

SECTION 116. Exhibits.
--------

21
<PAGE>

All exhibits attached hereto are by this reference made a part
hereof with the same effect as if herein set forth in full.

SECTION 117. Counterparts.
------------

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

SECTION 118. Duplicate Originals.
-------------------

The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

ARTICLE TWO

SECURITY FORMS

SECTION 201. Forms Generally.
---------------

The Securities and the Trustee's certificate of authentication with
respect thereto shall be in substantially the form set forth in Exhibit A
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or system on which the Securities may be listed or eligible
for trading or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities.
Any portion of the text of any Security may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Security.

The definitive Securities shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner permitted by
the rules of any securities exchange or system on which the Securities may be
listed or eligible for trading, all as determined by the officers of the Company
executing such Securities, as evidenced by their execution of such Securities.

ARTICLE THREE

THE SECURITIES

SECTION 301. Title and Terms.
---------------

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $250,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 906, 1010, 1018 or 1108.

The Securities shall be known and designated as the "10 % Series B
Senior Notes Due 2007" of the Company. Their Stated Maturity shall be April 1,
2007, and they shall bear interest at the rate of 10 % per annum from March 31,
1997, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, payable on October 1, 1997 and semiannually
thereafter on April 1 and October 1, in each year and at said Stated Maturity,
until the principal thereof is paid or duly provided for. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.

22
<PAGE>

Principal of, premium, if any, and interest on the Securities will
be payable, and the Securities may be exchanged or transferred, at the office or
agency of the Company in The City of New York, which, unless otherwise provided
by the Company, will be the offices of the Trustee. At the option of the
Company, interest may be paid by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Security Register.

The Securities shall be redeemable as provided in Article Eleven.

At the election of the Company, the entire Debt on the Securities or
certain of the Company's obligations and covenants and certain Events of Default
thereunder may be defeased as provided in Article Twelve.

The Securities will be senior unsecured obligations of the Company,
ranking pari passu in right of payment with all existing and future senior
unsecured Debt of the Company, and will be senior in right of payment to all
existing and future Subordinated Debt of the Company.

SECTION 302. Denominations.
-------------

The Securities will be issued without coupons and in fully
registered form only, in minimum denominations of $1,000 principal amount and
integral multiples thereof.

SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------

The Securities shall be executed on behalf of the Company by its
Chairman, its President or a Vice President, under its corporate seal reproduced
thereon and attested by its Secretary or an Assistant Secretary. The signature
of any of these officers on the Securities may be manual or facsimile signatures
of the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.

Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.

The Trustee shall authenticate Securities for original issue in an
aggregate principal amount not to exceed $250,000,000 upon receipt of a Company
Order, which shall, specify the amount of Securities to be authenticated, the
names of the persons in which such Securities shall be registered and the date
on which such Securities are to be authenticated and direct the Trustee to
authenticate such Securities together with an Officers' Certificate certifying

23
<PAGE>

that all conditions precedent to the issuance of such Securities contained
herein have been complied with. The aggregate principal amount of Securities
Outstanding at any time shall not exceed $250,000,000, except as provided in
Section 304.

Except as described below, the Securities will be deposited with, or
on behalf of, the Depository, and registered in the name of Cede & Co. as the
Depository's nominee in the form of a global note certificate substantially in
the form of Exhibit A (the "Global Security"), for credit to the respective
accounts of the beneficial owners of the Securities represented thereby.

In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an
entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a conveyance, transfer,
lease or other disposition as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article Eight, any of the
Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time Outstanding for Securities authenticated
and delivered in such new name.

SECTION 304. Temporary Securities.
--------------------

Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.

If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 1002, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.

24
<PAGE>

SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------

The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Security Register shall be in
written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Security Register shall
be open to inspection by the Trustee. The Trustee is hereby initially appointed
as security registrar (the "Security Registrar") for the purpose of registering
Securities and transfers of Securities as herein provided.

Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations of a like aggregate principal amount.

At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.

All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Security Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1010, 1018 or 1108 not involving
any transfer.

The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the selection of Securities to be redeemed under
Section 1104 and ending at the close of business on the day of such mailing of
the relevant notice of redemption or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------

If (i) any mutilated Security is surrendered to the Trustee or
(ii) the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the

25
<PAGE>

Company shall execute and upon Company Order the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------

Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest at the
office or agency of the Company maintained for such purpose pursuant to
Section 1002; provided, however, that each installment of interest may at the
Company's option be paid by mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears in the Security Register.

Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to
be payable to the Holder on the Regular Record Date by virtue of having been
such Holder, and such defaulted interest and (to the extent lawful) interest on
such defaulted interest at the rate borne by the Securities (such defaulted
interest and interest thereon herein collectively called "Defaulted Interest")
may be paid by the Company, at its election in each case, as provided in
paragraph (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to

27
<PAGE>

the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date, and in the
name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be given in the manner provided for in Section 106, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
given, such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer
be payable pursuant to the following paragraph (2).

(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or system on which the Securities may be listed or
eligible for trading, and upon such notice as may be required by such
exchange or system, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

SECTION 308. Persons Deemed Owners.
---------------------

Prior to the due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Sections 305 and 307) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and none
of the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.

SECTION 309. Cancellation.
------------

All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures and certification of their disposal delivered to the Company unless
by Company Order the Company shall direct that cancelled Securities be returned
to it.

27
<PAGE>

SECTION 310. Computation of Interest.
-----------------------

Interest on the Securities shall be computed on the basis of a
360-day year comprised of twelve 30-day months.

SECTION 311. CUSIP Number.
------------

The Company in issuing the Securities may use a "CUSIP" number (if
then generally in use), and if so, the Trustee may use the CUSIP numbers in
notices of redemption or exchange as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the
Trustee in writing of any change in the CUSIP number of the Securities.

SECTION 312. Book-Entry Provisions for Global Securities.
-------------------------------------------

(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit A.

Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.

(b) Transfers of Global Securities shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in a Global Security may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository. In addition, Physical Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as a depository for such Global Security or if
at any time the Depository ceases to be a clearing agency registered under the
Exchange Act, and a successor depository is not appointed by the Company within
90 days, (ii) the Company executes and delivers to the Trustee a notice that
such Global Security shall be so transferable, registrable and exchangeable, and
such transfer shall be registrable, or (iii) there shall have occurred and be
continuing a Default or Event of Default with respect to the Securities
represented by such Global Security.

(c) In connection with any transfer or exchange of a portion of
the beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Security Registrar shall (if one or more Physical Securities
are to be issued) reflect on its books and records the date and a decrease in
the principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and principal amount of authorized
denominations.

28
<PAGE>

(d) In connection with the transfer of the Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Securities, an equal aggregate principal amount of
Physical Securities of like tenor of authorized denominations.

(e) The Holder of any Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.

SECTION 313. [omitted]

ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------

This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Securities expressly provided for herein or pursuant hereto) and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when

(1) either

(a) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been
deposited in trust with the Trustee or any Paying Agent or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust as provided in
Section 1003) have been delivered to the Trustee for cancellation;
or

(b) all such Securities not theretofore delivered to the
Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated
Maturity within one year, or

(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,

and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount sufficient to pay
and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest to the date of such deposit (in
the case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;

29
<PAGE>

(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607 and, if money
shall have been deposited with the Trustee pursuant to clause (1)(b) of this
Section 401, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.
--------------------------

Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default.
-----------------

"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

(1) default in the payment of the principal of (or premium, if
any, on) any Security at its Maturity; or

(2) default in the payment of any interest on any Security when it
becomes due and payable, and continuance of such default for a period of
30 days; or

(3) default in the payment of principal and interest on any
Security required to be purchased pursuant to an Offer to Purchase
pursuant to Section 1010 or 1018; or

(4) default in the performance, or breach, of Section 801 or 1018;
or

(5) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or in any Security (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities a written notice specifying

30
<PAGE>

such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or

(6) a default or defaults under any bond(s), debenture(s), note(s)
or other evidence(s) of indebtedness by the Company or any Restricted
Subsidiary or under any mortgage(s), indenture(s) or instrument(s) under
which there may be issued or by which there may be secured or evidenced
any indebtedness of such type by the Company or any such Restricted
Subsidiary with a principal amount then outstanding, individually or in
the aggregate, in excess of $10 million, whether such indebtedness now
exists or shall hereafter be created, which default or defaults shall
result in the acceleration of the payment of such indebtedness or shall
constitute a failure to pay the principal of such indebtedness when due at
the final maturity thereof, or shall have resulted in excess of $10
million of indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise have become due and payable (after
expiration of any applicable grace period); or

(7) a final judgment or final judgments for the payment of money
are entered against the Company or any Restricted Subsidiary in an
aggregate amount in excess of $10 million by a court or courts of
competent jurisdiction, which judgment or judgments remain undischarged or
unbonded for a period (during which execution shall not be effectively
stayed) of 45 days after the right to appeal all such judgments has
expired; or

(8) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company or any Restricted Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Restricted Subsidiary under the Federal Bankruptcy Code
or any other applicable federal or state law, or appointing a receiver,
liquidator, assignee, trustee or sequestrator (or other similar official)
of the Company or any Restricted Subsidiary or of any substantial part of
its property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for
a period of 60 consecutive days; or

(9) the institution by the Company or any Restricted Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by
it to the institution of bankruptcy or insolvency proceedings against it,
or the filing by it of a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Code or any other
applicable federal or state law, or the consent by it to the filing of any
such petition or to the appointment of a receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of the Company or any
Restricted Subsidiary or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------

If an Event of Default (other than an Event of Default specified in
Section 501(8) or 501(9)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal amount of all the Securities to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount shall become immediately due and payable. If an Event of Default
specified in Section 501(8) or 501(9) occurs and is continuing, then the

31
<PAGE>

principal amount of all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.

At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article Five, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if

(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay

(A) all overdue interest on all Outstanding Securities,

(B) all unpaid principal of (and premium, if any, on) any
Outstanding Securities which has become due otherwise than by such
declaration of acceleration, and interest on such unpaid principal
at the rate borne by the Securities,

(C) to the extent that payment of such interest is lawful,
interest on overdue interest at the rate borne by the Securities,
and

(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and

(2) all Events of Default, other than the nonpayment of amounts of
principal of (or premium, if any, on) Securities which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

Notwithstanding the preceding paragraph, in the event that a
declaration of acceleration in respect of the Securities due to an Event of
Default specified in Section 501(6) shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the Debt that is
the subject of such Event of Default has been discharged or the holders thereof
have rescinded their declaration of acceleration in respect of such Debt, and
written notice of such discharge or rescission, as the case may be, shall have
been given to the Trustee by the Company and countersigned by the holders of
such Debt or a trustee, fiduciary or agent for such holders, within 30 days
after such declaration of acceleration in respect of the Securities, and no
other Event of Default has occurred during such 30-day period which has not been
cured or waived during such period.

SECTION 503. Collection of Indebtedness and Suits for Enforcement
----------------------------------------------------
by Trustee.
- ----------

The Company covenants that if

(a) default is made in the payment of any installment of interest
on any Security when such interest becomes due and payable and such
default continues for a period of 30 days, or

(b) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,

32
<PAGE>

the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Securities the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.

If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,

(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel) and of the Holders
allowed in such judicial proceeding, and

(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator or sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 607.

Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities

33
<PAGE>

or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------

All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

SECTION 506. Application of Money Collected.
------------------------------

Any money collected by the Trustee pursuant to this Article Five
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under
Section 607;

SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and
premium, if any) and interest, respectively; and

THIRD: The balance, if any, to the Person or Persons entitled
thereto.

SECTION 507. Limitation on Suits.
-------------------

No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless

(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;

(2) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities
to be incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and

34
<PAGE>

(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority or more in aggregate principal amount of the Outstanding
Securities;

it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal,
---------------------------------------------------
Premium and Interest.
- --------------------

Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment as provided herein (including, if applicable, Article Twelve)
and in such Security of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.
----------------------------------

If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.
------------------------------

Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver.
----------------------------

No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five or
by law to the Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.

SECTION 512. Control by Holders.
------------------

The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities shall have the right to direct the time,

35
<PAGE>

method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, provided
that

(1) such direction shall not be in conflict with any rule of law
or with this Indenture,

(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and

(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.

SECTION 513. Waiver of Past Defaults.
-----------------------

The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may on behalf of the Holders of all the
Securities waive any past default hereunder and its consequences, except a
default

(1) in respect of the payment of the principal of (or premium, if
any) or interest on any Security, or

(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.

Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

SECTION 514. Waiver of Stay or Extension Laws.
--------------------------------

The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it shall not hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law had been enacted.

ARTICLE SIX

THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.
-----------------------------------

(a) Except during the continuance of an Event of Default,

(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and

(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness

36
<PAGE>

of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.

(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that

(1) this paragraph (c) shall not be construed to limit the effect
of paragraph (a) of this Section 601;

(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Out-
standing Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture; and

(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or indemnity reasonably satisfactory to it
against such risk or liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 601.

SECTION 602. Notice of Default.
-----------------

Within 60 days after the occurrence of any Default hereunder, the
Trustee shall transmit, in the manner and to the extent provided in TIA
Section 313(c), notice of such Default hereunder known to any Responsible
Officer of the Trustee, unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in the payment of the
principal of (or premium, if any) or interest on any Security, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders; and provided
further that in the case of any Default of the character specified in
Section 501(5) no such notice to Holders shall be given until at least 30 days
after the occurrence thereof.

37
<PAGE>

SECTION 603. Certain Rights of Trustee.
-------------------------

Subject to Section 601 and to the provisions of TIA Sections 315(a)
through 315(d):

(1) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;

(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;

(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, receive and rely upon an Officers' Certificate;

(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;

(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;

(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;

(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;

(8) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture; and

(9) the Trustee shall have no duties, obligations or liability in
connection with any Event of Default hereunder unless a Responsible
Officer of the Trustee has knowledge thereof.

38
<PAGE>

The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Securities.
- ----------

The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.

SECTION 605. May Hold Securities.
-------------------

The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar or
such other agent. If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

SECTION 606. Money Held in Trust.
-------------------

Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.

SECTION 607. Compensation and Reimbursement.
------------------------------

The Company agrees:

(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to the Trustee's
negligence or bad faith; and

(3) to indemnify the Trustee and its directors, officers,
employees and agents for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part
of any of them, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself or themselves against any claim or liability in

39
<PAGE>

connection with the exercise or performance of any of its or their powers
or duties hereunder.

The obligations of the Company under this Section 607 to compensate
the Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the
Trustee. As security for the performance of such obligations of the Company,
the Trustee shall have a claim prior to the Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the payment of principal of (and premium, if any) or interest on particular
Securities.

When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(8) or (9), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.

The provisions of this Section 607 shall survive the termination of
this Indenture or the earlier resignation or removal of the Trustee.

SECTION 608. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests.
- ---------

(a) There shall be at all times a Trustee hereunder which shall be
subject to and comply with the provisions of Section 310(a)(1) of the Trust
Indenture Act and shall have a combined capital and surplus of at least
$50,000,000. If such Corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then, for the
purposes of this Section 608, the combined capital and surplus of such
Corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
608, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article Six.

(b) The Trustee shall be subject to and comply with Section 310(b)
of the Trust Indenture Act.

SECTION 609. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 610.

(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 610 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

(c) The Trustee may be removed at any time by Act of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.

40
<PAGE>

(d) If at any time:

(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or

(2) the Trustee shall cease to be eligible under Section 608(a)
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at least
six months, or

(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.

(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Securities in the manner provided for in Section 106. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.

(g) The retiring Trustee shall not be liable for any of the acts
or omissions of any successor Trustee appointed hereunder.

SECTION 610. Acceptance of Appointment by Successor.
--------------------------------------

Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor

42
<PAGE>

Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.

No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.

SECTION 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------

Any Corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such Corporation shall be otherwise qualified and eligible under
this Article Six, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities. In case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee.
In all such cases such certificates shall have the full force and effect which
this Indenture provides that the certificate of authentication of the Trustee
shall have; provided, however, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.

ARTICLE SEVEN

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Disclosure of Names and Addresses of Holders.
--------------------------------------------

Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA
Section 312(b).

SECTION 702. Reports by Trustee.
------------------

Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Securities, the Trustee shall transmit to the
Holders, each stock exchange upon which the Securities are listed, and the
Commission, in the manner and to the extent provided in TIA Section 313, a brief
report dated as of such May 15 if required by TIA Section 313.

42
<PAGE>

SECTION 703. Reports by Company.
------------------

The Company shall file with the Trustee and deliver to the Holders
of Securities the reports and other information required to be provided by it
pursuant to Section 1008.

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not, in a single transaction or a series of
related transactions, (i) consolidate with or merge into any other Person or
Persons or permit any other Person to consolidate with or merge into the Company
(other than a merger of Qwest Corporation into the Company in which the Company
shall be the surviving Person) or (ii) directly or indirectly, transfer, sell,
lease or otherwise dispose of all or substantially all of its assets to any
other Person or Persons, unless, in any such transaction specified in clause (i)
or (ii):

(1) in a transaction in which the Company is not the surviving
Person or in which the Company sells, leases or otherwise disposes of all
or substantially all of its assets to any other Person, the resulting,
surviving or transferee Person (the "successor entity") is organized under
the laws of the United States of America or any State thereof or the
District of Columbia and shall expressly assume, by a supplemental
indenture executed and delivered to the Trustee in form satisfactory to
the Trustee, all of the Company's obligations under this Indenture;

(2) immediately before and after giving effect to such
transaction and treating any Debt which becomes an obligation of the
Company or a Restricted Subsidiary as a result of such transaction as
having been Incurred by the Company or such Restricted Subsidiary at the
time of the transaction, no Default or Event of Default shall have
occurred and be continuing;

(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company (or other successor entity to the
Company) is equal to or greater than that of the Company immediately prior
to the transaction;

(4) immediately after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company or a
Restricted Subsidiary as a result of such transaction as having been
Incurred by the Company or such Restricted Subsidiary at the time of the
transaction, the Company (including any successor entity to the Company)
could Incur at least $1.00 of additional Debt pursuant to the provisions
of paragraph (a) of Section 1011;

(5) if, as a result of any such transaction, property or assets of
the Company would become subject to a Lien prohibited by the provisions of
Section 1015, the Company or the successor entity to the Company shall
have secured the Securities as required by such Section 1015; and

(6) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, stating that such consolidation,
merger, conveyance, transfer, lease or acquisition and, if a supplemental
indenture is required in connection with such transaction, such

43
<PAGE>

supplemental indenture, complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with, and, with respect to such Officers' Certificate, setting
forth the manner of determination of the Consolidated Net Worth, in
accordance with clause (3) of this Section 801, of the Company or, if
applicable, of the successor entity as required pursuant to the foregoing.

SECTION 802. Successor Substituted.
---------------------

Upon any consolidation of the Company with or merger of the Company
with or into any other Corporation or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
or Persons in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and, in the event of any such conveyance or transfer, the Company (which term
shall for this purpose mean the Person named as the "Company" in the first
paragraph of this Indenture or any successor Person which shall have become such
in the manner described in Section 801), except in the case of a lease, shall be
discharged of all obligations and covenants under this Indenture and the
Securities and may be dissolved and liquidated.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form and substance
satisfactory to the Trustee, for any of the following purposes:

(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
contained herein and in the Securities; or

(2) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company; or

(3) to add any additional Events of Default; or

(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of
Section 610; or

(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; provided that such action shall not adversely affect
the interests of the Holders in any material respect; or

(6) to secure the Securities pursuant to the requirements of
Section 1016.

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<PAGE>

SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------

With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:

(1) change the Stated Maturity of the principal of or any
installment of interest on any Security, or reduce the principal amount
thereof (or premium, if any) or the rate of interest thereon or reduce the
amount of the principal of the Securities that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502 or the amount thereof provable in bankruptcy pursuant to
Section 504, or change the coin or currency in which any Security or any
premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment after the Stated
Maturity thereof (or, in the case of redemption, on or after the
Redemption Date); or

(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture; or

(3) modify any of the provisions of this Section 902 or
Sections 513 and 1023, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Security
affected thereby.

It shall not be necessary for any Act of Holders under this Section
902 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.
------------------------------------

In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate stating that all
conditions precedent to the execution of such supplemental indenture have been
fulfilled. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.
---------------------------------

Upon the execution of any supplemental indenture under this Article
Nine, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.

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<PAGE>

SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------

Every supplemental indenture executed pursuant to this Article Nine
shall conform as a matter of contract or law to the requirements of the Trust
Indenture Act as then in effect.

SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------

Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may bear a notation in form
approved by the Trustee and the Company as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.

SECTION 907. Notice of Supplemental Indentures.
---------------------------------

Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture.

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium, if Any, and Interest.
---------------------------------------------------

The Company covenants and agrees for the benefit of the Holders that
it shall duly and punctually pay the principal of (and premium, if any) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.

SECTION 1002. Maintenance of Office or Agency.
-------------------------------

The Company shall maintain in The City of New York an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Corporate Trust Office of the Trustee shall be
such office or agency of the Company, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes. The
Company shall give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of any

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<PAGE>

such designation or rescission and any change in the location of any such other
office or agency.

SECTION 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------

If the Company shall at any time act as its own Paying Agent, it
shall, on or before each due date of the principal of (or premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal of (or
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and shall promptly
notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for the
Securities, it shall, on or before each due date of the principal of (or
premium, if any) or interest on any Securities, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.

The Company shall cause each Paying Agent (other than the Trustee)
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 1003,
that such Paying Agent shall:

(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest;

(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent; and

(4) indemnify the Trustee and its officers, directors, employees
and agents against any loss, cost or liability caused by, or incurred as a
result of, such Paying Agent's acts or omissions.

The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.

Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal, premium or interest has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust

47
<PAGE>

money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

SECTION 1004. Corporate Existence.
-------------------

Subject to Article Eight, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary; provided, however, that the Company shall not be required to
preserve, with respect to the Company, any such right or franchise or, with
respect to any Subsidiary (subject to all the other covenants in this
Indenture), any such corporate existence, right or franchise, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries as a whole
and that the loss thereof is not disadvantageous in any material respect to the
Holders.

SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------

The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary and (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Restricted Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.

SECTION 1006. Maintenance of Properties.
-------------------------

The Company shall cause all properties owned by the Company or any
Restricted Subsidiary or used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 1006 shall prevent the Company from discontinuing the
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.

SECTION 1007. Insurance.
---------

The Company shall at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by Corporations
similarly situated and owning like properties.

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<PAGE>

SECTION 1008. Provision of Financial Statements.
---------------------------------

The Company shall provide the Trustee, the Initial Purchasers, the
Holders of the Securities and (upon request) prospective holders of the
Securities without cost with annual and quarterly reports and such other
information as is specified under Sections 13 and 15(d) of the Securities Act on
the date on which the Company is required to file the same with the Commission.

SECTION 1009. Statement by Officers as to Default.
-----------------------------------

(a) The Company shall deliver to the Trustee, on the date of
delivery of each quarterly report to be delivered pursuant to Section 1008, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Indenture.
For purposes of this Section 1009(a), such compliance shall be determined
without regard to any period of grace or requirement of notice under this
Indenture.

(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of Debt of
the Company or any Restricted Subsidiary gives any notice or takes any other
action with respect to a claimed default (other than with respect to Debt in the
principal amount of less than $5,000,000), the Company shall deliver to the
Trustee by registered or certified mail or by telegram, telex or facsimile
transmission an Officers' Certificate specifying such event, notice or other
action within five Business Days of its occurrence.

SECTION 1010. Purchase of Securities upon Change of Control.
---------------------------------------------

(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Company repurchase such Holder's Securities
in whole or in part in integral multiples of $1,000, in accordance with the
procedures set forth in this Section 1010 and this Indenture.

(b) Within 30 days of the occurrence of a Change of Control, the
Company shall mail an Offer with respect to an Offer to Purchase all Outstanding
Securities at a price in cash equal to 101% of the principal amount of the
Securities plus accrued and unpaid interest thereon and premium, if any, to the
purchase date. Installments of interest whose Stated Maturity is on or prior to
the Purchase Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307. Each Holder shall be entitled to tender all or any portion of the
Securities owned by such Holder pursuant to the Offer to Purchase, subject to
the requirement that any portion of a Security tendered must be tendered in an
integral multiple of $1,000 principal amount.

(c) The Company and the Trustee shall perform their respective
obligations for the Offer to Purchase as specified in the Offer. Prior to the
Purchase Date, the Company shall (i) accept for payment Securities or portions
thereof tendered pursuant to the Offer, (ii) deposit with the Paying Agent (or,
if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) money sufficient to pay the purchase price of all
Securities or portions thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof accepted for payment by
the Company. The Paying Agent shall promptly mail or deliver to Holders of
Securities so accepted payment in an amount equal to the Purchase Price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security or Securities equal in principal amount to any unpurchased portion of

49
<PAGE>

the Security surrendered as requested by the Holder. Any Security not accepted
for payment shall be promptly mailed or delivered by the Company to the Holder
thereof.

(d) A "Change of Control" shall be deemed to have occurred at such
time as (i) a Rating Decline shall have occurred and (ii) either (A) the sale,
conveyance, transfer or lease of all or substantially all of the assets of the
Company to any Person or any Persons acting together that would constitute a
"group" (a "Group") for purposes of Section 13(d) of the Exchange Act, together
with any Affiliates or Related Persons thereof, other than any Permitted Holder
or any Restricted Subsidiary, shall have occurred; (B) any Person or Group,
together with any Affiliates or Related Persons thereof, other than any
Permitted Holder or any Restricted Subsidiary, shall beneficially own (within
the meaning of Rule 13d-3 under the Exchange Act, except that a Person shall be
deemed to have beneficial ownership of all shares that such Person has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time) at least 50% of the aggregate voting power of all classes of
Voting Stock of the Company at a time when Permitted Holders own less than or
equal to 25% of the aggregate voting power of all classes of Voting Stock of the
Company; or (C) during any period of two consecutive years, Continuing Directors
cease for any reason to constitute a majority of the Board of Directors then in
office.

(e) In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act.

SECTION 1011. Limitation on Consolidated Debt.
-------------------------------

(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Debt, unless, after giving effect to the application of
the proceeds thereof, no Default or Event of Default would occur as a
consequence of such Incurrence or be continuing following such Incurrence and
either (i) the ratio of (A) the aggregate consolidated principal amount of Debt
of the Company outstanding as of the most recent available quarterly or annual
balance sheet, after giving pro forma effect to the Incurrence of such Debt and
any other Debt Incurred or repaid since such balance sheet date and the receipt
and application of the proceeds thereof, to (B) Consolidated Cash Flow Available
for Fixed Charges for the four full fiscal quarters next preceding the
Incurrence of such Debt for which consolidated financial statements are
available, determined on a pro forma basis as if any such Debt had been Incurred
and the proceeds thereof had been applied at the beginning of such four fiscal
quarters, would be less than 5.5 to 1.0 for Debt Incurred on or prior to April
1, 2000 and 5.0 to 1.0 for Debt Incurred thereafter, or (ii) the Company's
Consolidated Capital Ratio as of the most recent available quarterly or annual
balance sheet, after giving pro forma effect to the Incurrence of such Debt and
any other Debt Incurred or repaid since such balance sheet date and the receipt
and application of the proceeds thereof, is less than 2.0 to 1.0.

(b) Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur any and all of the following (each of which
shall be given independent effect):

(i) Debt under the Securities, this Indenture and any Restricted
Subsidiary Guarantee;

50
<PAGE>

in an aggregate principal amount at any time outstanding not to exceed the
greater of (x) $100 million or (y) 85% of Eligible Receivables;

(iv) Debt owed by the Company to any Restricted Subsidiary of the
Company or Debt owed by a Restricted Subsidiary of the Company to the
Company or a Restricted Subsidiary of the Company; provided, however, that
upon either (x) the transfer or other disposition by such Restricted
Subsidiary or the Company of any Debt so permitted to a Person other than
the Company or another Restricted Subsidiary of the Company or (y) the
issuance (other than directors' qualifying shares), sale, lease, transfer
or other disposition of shares of Capital Stock (including by
consolidation or merger) of such Restricted Subsidiary to a Person other
than the Company or another such Restricted Subsidiary, the provisions of
this clause (iv) shall no longer be applicable to such Debt and such Debt
shall be deemed to have been Incurred by the issuer thereof at the time of
such transfer or other disposition;

(v) Debt Incurred to renew, extend, refinance, defease or refund
(each, a "refinancing") the Securities or Debt of the Company Incurred
pursuant to clause (iii) of this paragraph (b), in an aggregate principal
amount not to exceed the aggregate principal amount of and accrued
interest on the Debt so refinanced plus the amount of any premium required
to be paid in connection with such refinancing pursuant to the terms of
the Debt so refinanced or the amount of any premium reasonably determined
by the Board of Directors as necessary to accomplish such refinancing by
means of a tender offer or privately negotiated repurchase, plus the
expenses of the Company Incurred in connection with such refinancing;
provided, however, that Debt the proceeds of which are used to refinance
the Securities or Debt which is pari passu to the Securities or Debt which
is subordinate in right of payment to the Securities shall only be
permitted under this clause (v) if (A) in the case of any refinancing of
the Securities or Debt which is pari passu to the Securities, the
refinancing Debt is made pari passu to the Securities or constitutes
Subordinated Debt, and, in the case of any refinancing of Subordinated
Debt, the refinancing Debt constitutes Subordinated Debt, and (B) in any
case, the refinancing Debt by its terms, or by the terms of any agreement
or instrument pursuant to which such Debt is issued, (x) does not provide
for payments of principal of such Debt at Stated Maturity or by way of a
sinking fund applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof by the Company (including any
redemption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of the
acceleration of any payment with respect to such Debt upon any event of
default thereunder), in each case prior to the time the same are required
by the terms of the Debt being refinanced, and (y) does not permit
redemption or other retirement (including pursuant to an offer to purchase
made by the Company) of such Debt at the option of the holder thereof
prior to the time the same are required by the terms of the Debt being
refinanced, other than a redemption or other retirement at the option of
the holder of such Debt (including pursuant to an offer to purchase made
by the Company) which is conditioned upon a change of control pursuant to
provisions substantially similar to those described under Section 1010;

(vi) Debt consisting of Permitted Interest Rate and Currency
Protection Agreements;

51
<PAGE>

(vii) Debt secured by Receivables originated by the Company or any
Restricted Subsidiary and related assets, provided that such Debt is
nonrecourse to the Company and any of its other Restricted Subsidiaries
and provided further that Receivables shall not be available at any time
to secure Debt of the Company under this clause (vii) to the extent that
they are used at such time as the basis for the Incurrence of Debt in
excess of $100 million pursuant to clause (ii)(B)(y) of this paragraph
(b); and

(viii) Debt not otherwise permitted to be Incurred pursuant to
clauses (i) through (vii) above, which, together with any other
outstanding Debt Incurred pursuant to this clause (viii), has an aggregate
principal amount not in excess of $25 million at any time outstanding.

SECTION 1012. Limitation on Debt and Preferred Stock of Restricted
----------------------------------------------------
Subsidiaries.
- ------------

The Company shall not permit any Restricted Subsidiary that is not a
Guarantor to Incur any Debt or issue any Preferred Stock except any and all of
the following (each of which shall be given independent effect):

(i) Restricted Subsidiary Guarantees;

(ii) Debt of Restricted Subsidiaries under Credit Facilities
permitted to be Incurred pursuant to clause (ii) of paragraph (b) of
Section 1011;

(iii) Purchase Money Debt of Restricted Subsidiaries permitted to
be Incurred pursuant to clause (iii) of paragraph (b) of Section 1011;

(iv) Debt owed by a Restricted Subsidiary of the Company to the
Company or a Restricted Subsidiary of the Company permitted to be Incurred
pursuant to clause (iv) of paragraph (b) of Section 1011;

(v) Debt of Restricted Subsidiaries consisting of Permitted
Interest Rate and Currency Protection Agreements permitted to be Incurred
pursuant to clause (vi) of paragraph (b) of Section 1011;

(vi) Debt of Restricted Subsidiaries secured by Receivables
originated by the Company or any Restricted Subsidiary and related assets
permitted to be Incurred pursuant to clause (vii) of paragraph (b) of
Section 1011;

(vii) Debt of Restricted Subsidiaries permitted to be Incurred
pursuant to clause (viii) of paragraph (b) of Section 1011;

(viii) Preferred Stock issued to and held by the Company or a
Restricted Subsidiary;

(ix) Debt Incurred or Preferred Stock issued by a Person prior to
the time (A) such Person became a Restricted Subsidiary, (B) such Person
merges into or consolidates with a Restricted Subsidiary or (C) another
Restricted Subsidiary merges into or consolidates with such Person (in a
transaction in which such Person becomes a Restricted Subsidiary), which
Debt or Preferred Stock was not Incurred or issued in anticipation of such
transaction and was outstanding prior to such transaction; and

(x) Debt or Preferred Stock which is exchanged for, or the
proceeds of which are used to renew, extend, refinance, defease, refund or
redeem, any Debt of a Restricted Subsidiary permitted to be Incurred
pursuant to clause (iii) of this Section 1012 or any Debt or Preferred

52
<PAGE>

Stock of a Restricted Subsidiary permitted to be Incurred pursuant to
clause (ix) of this Section 1012 (or any extension or renewal thereof)
(for purposes hereof, a "refinancing"), in an aggregate principal amount,
in the case of Debt, or with an aggregate liquidation preference, in the
case of Preferred Stock, not to exceed the aggregate principal amount of
the Debt so refinanced or the aggregate liquidation preference of the
Preferred Stock so refinanced, plus the amount of any premium required to
be paid in connection with such refinancing pursuant to the terms of the
Debt or Preferred Stock so refinanced or the amount of any premium
reasonably determined by the Company as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated repurchase,
plus the amount of expenses of the Company and the applicable Restricted
Subsidiary Incurred in connection therewith, and provided the Debt or
Preferred Stock Incurred or issued upon such refinancing, by its terms, or
by the terms of any agreement or instrument pursuant to which such Debt or
Preferred Stock is Incurred or issued, (x) does not provide for payments
of principal or liquidation value at the Stated Maturity of such Debt or
Preferred Stock or by way of a sinking fund applicable to such Debt or
Preferred Stock or by way of any mandatory redemption, defeasance,
retirement or repurchase of such Debt or Preferred Stock by the Company or
any Restricted Subsidiary (including any redemption, retirement or
repurchase which is contingent upon events or circumstances, but excluding
any retirement required by virtue of acceleration of such Debt upon an
event of default thereunder), in each case prior to the time the same are
required by the terms of the Debt or Preferred Stock being refinanced and
(y) does not permit redemption or other retirement (including pursuant to
an offer to purchase made by the Company or a Restricted Subsidiary) of
such Debt or Preferred Stock at the option of the holder thereof prior to
the Stated Maturity of the Debt or Preferred Stock being refinanced, other
than a redemption or other retirement at the option of the holder of such
Debt or Preferred Stock (including pursuant to an Offer to Purchase made
by the Company or a Restricted Subsidiary) which is conditioned upon the
change of control of the Company pursuant to provisions substantially
similar to those contained in Section 1010, and provided further that, in
the case of any exchange or redemption of Preferred Stock of a Restricted
Subsidiary, such Preferred Stock may only be exchanged for or redeemed
with Preferred Stock of such Restricted Subsidiary.

SECTION 1013. Limitation on Restricted Payments.
---------------------------------

The Company (i) shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, declare or pay any dividend, or make any
distribution, in respect of its Capital Stock or to the holders thereof,
excluding any dividends or distributions which are made solely to the Company or
a Restricted Subsidiary (and, if such Restricted Subsidiary is not a Wholly
Owned Subsidiary, to the other stockholders of such Restricted Subsidiary on a
pro rata basis) or any dividends or distributions payable solely in shares of
its Capital Stock (other than Disqualified Stock) or in options, warrants or
other rights to acquire its Capital Stock (other than Disqualified Stock);
(ii) shall not, and shall not permit any Restricted Subsidiary to, purchase,
redeem or otherwise retire or acquire for value (x) any Capital Stock of the
Company, any Restricted Subsidiary or any Related Person of the Company (other
than a permitted refinancing) or (y) any options, warrants or rights to purchase
or acquire shares of Capital Stock of the Company, any Restricted Subsidiary or
any Related Person of the Company or any securities convertible or exchangeable
into shares of Capital Stock of the Company, any Restricted Subsidiary or any
Related Person of the Company (other than a permitted refinancing), except, in
any such case, any such purchase, redemption or retirement or acquisition for
value paid to the Company or a Restricted Subsidiary (or, in the event of any
such purchase, redemption or other retirement or acquisition for value with
respect to a Restricted Subsidiary that is not a Wholly Owned Subsidiary, paid

53
<PAGE>

to the Company or a Restricted Subsidiary, or to the other stockholders of such
Restricted Subsidiary that is not a Wholly Owned Subsidiary, on a pro rata
basis); (iii) shall not make, or permit any Restricted Subsidiary to make, any
Investment in, or payment on a Guarantee of any obligation of, any Person, other
than the Company or a Restricted Subsidiary; and (iv) shall not, and shall not
permit any Restricted Subsidiary to, redeem, defease, repurchase, retire or
otherwise acquire or retire for value, prior to any scheduled maturity,
repayment or sinking fund payment, Debt of the Company which is subordinate in
right of payment to the Securities (other than a permitted refinancing) (each of
clauses (i) through (iv) being a "Restricted Payment") if: (1) an Event of
Default, or an event that with the passing of time or the giving of notice, or
both, would constitute an Event of Default, shall have occurred and be
continuing, or (2) upon giving effect to such Restricted Payment, the Company
could not Incur at least $1.00 of additional Debt pursuant to the terms of
paragraph (a) of Section 1011, or (3) upon giving effect to such Restricted
Payment, the aggregate of all Restricted Payments from March 31, 1997 exceeds
the sum of: (a) 50% of cumulative Consolidated Net Income (or, in the event
that Consolidated Net Income shall be negative, 100% of such negative amount)
since the end of the last full fiscal quarter prior to March 31, 1997 through
the last day of the last full fiscal quarter ending at least 45 days prior to
the date of such Restricted Payment, (b) plus $5 million, (c) less, in the case
of any Designation with respect to a Restricted Subsidiary that was made after
March 31, 1997, an amount equal to the Designation Amount with respect to such
Restricted Subsidiary, (d) plus, in the case of any Revocation made after
March 31, 1997, an amount equal to the lesser of the Designation Amount with
respect to the Subsidiary with respect to which such Designation was made or the
Fair Market Value of the Investment of the Company and its Restricted
Subsidiaries in such Subsidiary at the time of Revocation; provided, however,
that the Company or a Restricted Subsidiary of the Company may make any
Restricted Payment with the aggregate net cash proceeds received after March 31,
1997 as capital contributions to the Company or from the issuance (other than to
a Subsidiary) of Capital Stock (other than Disqualified Stock) of the Company
and warrants, rights or options on Capital Stock (other than Disqualified Stock)
of the Company and the principal amount of Debt of the Company that has been
converted into Capital Stock (other than Disqualified Stock and other than by a
Subsidiary) of the Company after March 31, 1997.

Notwithstanding the foregoing limitation, (i) the Company and any
Restricted Subsidiary may make Permitted Investments; (ii) the Company may pay
any dividend on Capital Stock of any class of the Company within 60 days after
the declaration thereof if, on the date when the dividend was declared, the
Company could have paid such dividend in accordance with the foregoing
provisions; (iii) the Company may repurchase any shares of its Common Stock or
options to acquire its Common Stock from Persons who were formerly directors,
officers or employees of the Company or any of its Subsidiaries or Affiliates,
provided that the aggregate amount of all such repurchases made pursuant to this
clause (iii) shall not exceed $1 million in any twelve-month period; (iv) the
Company and any Restricted Subsidiary may refinance any Debt otherwise permitted
by clause (v) of paragraph (b) of Section 1011 or clause (x) of Section 1012;
and (v) the Company and any Restricted Subsidiary may retire or repurchase any
Capital Stock of the Company or of any Restricted Subsidiary in exchange for, or
out of the proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Capital Stock (other than Disqualified Stock) of
the Company.

SECTION 1014. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries.
- ---------------------------------

(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the

54
<PAGE>

ability of any Restricted Subsidiary (i) to pay dividends (in cash or otherwise)
or make any other distributions in respect of its Capital Stock owned by the
Company or any other Restricted Subsidiary or to pay any Debt or other
obligation owed to the Company or any other Restricted Subsidiary; (ii) to make
loans or advances to the Company or any other Restricted Subsidiary; or (iii) to
transfer any of its property or assets to the Company or any other Restricted
Subsidiary.

(b) Notwithstanding the foregoing limitation, the Company may, and
may permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist any such encumbrance or restriction (i) pursuant to any agreement in
effect on March 31, 1997; (ii) any customary encumbrance or restriction
applicable to a Restricted Subsidiary that is contained in an agreement or
instrument governing or relating to Debt contained in any Credit Facilities or
Purchase Money Debt, provided that the provisions of such agreement permit the
payment of interest and mandatory payment or prepayment of principal pursuant to
the terms of this Indenture and the Securities and other Debt that is solely an
obligation of the Company, but provided further that such agreement may
nevertheless contain customary net worth, leverage, invested capital and other
financial covenants, customary covenants regarding the merger of or sale of all
or any substantial part of the assets of the Company or any Restricted
Subsidiary, customary restrictions on transactions with Affiliates, and
customary subordination provisions governing Debt owed to the Company or any
Restricted Subsidiary; (iii) pursuant to an agreement relating to any Acquired
Debt, which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person so acquired; (iv)
pursuant to an agreement effecting a renewal, refunding, permitted refinancing
or extension of Debt Incurred pursuant to an agreement referred to in clause
(i), (ii) or (iii) of this paragraph (b), provided, however, that the provisions
contained in such renewal, refunding, permitted refinancing or extension
agreement relating to such encumbrance or restriction are no more restrictive in
any material respect than the provisions contained in the agreement the subject
thereof; (v) in the case of clause (iii) of paragraph (a) of this Section 1014,
restrictions contained in any security agreement (including a Capital Lease
Obligation) securing Debt of the Company or a Restricted Subsidiary otherwise
permitted under this Indenture, but only to the extent such restrictions
restrict the transfer of the property subject to such security agreement; (vi)
in the case of clause (iii) of paragraph (a) of this Section 1014, customary
nonassignment provisions entered into in the ordinary course of business in
leases and other agreements and customary restrictions contained in asset sale
agreements limiting the transfer of such property or assets pending the closing
of such sale; (vii) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary, provided that the consummation of such transaction would
not result in a Default or an Event of Default, that such restriction terminates
if such transaction is not consummated and that the consummation or abandonment
of such transaction occurs within one year of the date such agreement was
entered into; (viii) pursuant to applicable law; and (ix) pursuant to this
Indenture and the Securities.

SECTION 1015. Limitation on Liens.
-------------------

The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur or suffer to exist any Lien on or with respect to any
property or assets now owned or acquired after March 31, 1997 to secure any Debt
without making, or causing such Restricted Subsidiary to make, effective
provision for securing the Securities (x) equally and ratably with such Debt as
to such property for so long as such Debt will be so secured or (y) in the event
such Debt is Debt of the Company which is subordinate in right of payment to the

55
<PAGE>

Securities, prior to such Debt as to such property for so long as such Debt will
be so secured.

The foregoing restrictions shall not apply to: (i) Liens existing on
March 31, 1997 and securing Debt outstanding on March 31, 1997; (ii) Liens in
favor of the Company or any Restricted Subsidiary; (iii) Liens to secure the
Securities; (iv) Liens to secure Restricted Subsidiary Guarantees; (v) Liens to
secure Debt under Credit Facilities permitted to be Incurred pursuant to clause
(ii) of paragraph (b) of Section 1011; (vi) Liens on real or personal property
of the Company or a Restricted Subsidiary constructed, installed, acquired or
constituting improvements made after the date of original issuance of the
Securities to secure Purchase Money Debt permitted to be Incurred pursuant to
clause (iii) of paragraph (b) of Section 1011, provided, however, that (a) the
principal amount of any Debt secured by such a Lien does not exceed 100% of such
purchase price or cost of construction, installation or improvement of the
property subject to such Lien, (b) such Lien attaches to such property prior to,
at the time of or within 270 days after the acquisition, the completion of
construction, installation or improvement or the commencement of operation of
such property and (c) such Lien does not extend to or cover any property other
than the specific item of property (or portion thereof) acquired, constructed,
installed or constituting the improvements financed by the proceeds of such
Purchase Money Debt; (vii) Liens to secure Acquired Debt, provided, however,
that (a) such Lien attaches to the acquired asset prior to the time of the
acquisition of such asset and (b) such Lien does not extend to or cover any
other asset; (viii) Liens to secure Debt Incurred to extend, renew, refinance or
refund (or successive extensions renewals, refinancings or refundings), in whole
or in part, Debt secured by any Lien referred to in the foregoing clauses (i),
(iii), (iv), (v), (vi) and (vii) of this Section 1015 so long as such Lien does
not extend to any other property and the principal amount of Debt so secured is
not increased except as otherwise permitted under clause (v) of paragraph (b) of
Section 1011 or clause (x) of Section 1012; (ix) Liens to secure debt consisting
of Permitted Interest Rate and Currency Protection Agreements permitted to be
Incurred pursuant to clause (vi) of paragraph (b) of Section 1011; (x) Liens to
secure Debt secured by Receivables permitted to be Incurred pursuant to clause
(vii) of paragraph (b) of Section 1011; (xi) Liens to secure Debt of Restricted
Subsidiaries permitted to be Incurred pursuant to clause (viii) of paragraph (b)
of Section 1011; (xii) Liens not otherwise permitted by the foregoing clauses
(i) through (xi) in an amount not to exceed 5% of the Company's Consolidated
Tangible Assets; and (xiii) Permitted Liens.

SECTION 1016. Limitation on Issuances of Certain Guarantees by, and
-----------------------------------------------------
Debt Securities of, Restricted Subsidiaries.
- -------------------------------------------

The Company shall not (i) permit any Restricted Subsidiary to,
directly or indirectly, guarantee any Debt Securities of the Company or (ii)
permit any Restricted Subsidiary to issue any Debt Securities unless, in either
such case, such Restricted Subsidiary simultaneously executes and delivers a
Restricted Subsidiary Guarantee providing for a Guarantee of payment of the
Securities.

SECTION 1017. Limitation on Sale and Leaseback Transactions.
---------------------------------------------

The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, assume, Guarantee or
otherwise become liable with respect to any Sale and Leaseback Transaction,
other than a Sale and Leaseback Transaction between the Company or a Restricted
Subsidiary on the one hand and a Restricted Subsidiary or the Company on the
other hand, unless (i) the Company or such Restricted Subsidiary would be
entitled to Incur a Lien to secure Debt by reason of the provisions of Section
1015, equal in amount to the Attributable Value of the Sale and Leaseback
Transaction, without equally and ratably securing the Securities and (ii) the

56
<PAGE>

Sale and Leaseback Transaction is treated as an Asset Disposition and all of the
conditions of Section 1018 (including the provisions concerning the application
of Net Available Proceeds) are satisfied with respect to such Sale and Leaseback
Transaction, treating all of the consideration received in such Sale and
Leaseback Transaction as Net Available Proceeds for purposes of such Section
1018.

SECTION 1018. Limitation on Asset Dispositions.
--------------------------------

The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Disposition unless: (i) the Company or the
Restricted Subsidiary, as the case may be, receives consideration for such
disposition at least equal to the Fair Market Value for the assets sold or
disposed of as determined by the Board of Directors in good faith and evidenced
by a Board Resolution; and (ii) at least 75% of the consideration for such
disposition consists of cash or cash equivalents or the assumption of Debt of
the Company (other than Debt that is subordinated to the Securities) or of the
Restricted Subsidiary and release from all liability on the Debt assumed. If
the aggregate of Net Available Proceeds within any twelve-month period exceeds
$5 million, then all such Net Available Proceeds shall be applied within 360
days of the last such Asset Disposition (1) first, to the permanent repayment or
reduction of Debt then outstanding under any Credit Facility, to the extent such
agreements would require such application or prohibit payments pursuant to
clause (2) following; (2) second, to the extent of remaining Net Available
Proceeds, to make an Offer to Purchase Outstanding Securities at a price in cash
equal to 100% of the principal amount of the Securities plus accrued and unpaid
interest thereon and premium, if any, to the purchase date and, to the extent
required by the terms thereof, any other Debt of the Company that is pari passu
with the Securities at a price no greater than 100% of the principal amount
thereof plus accrued and unpaid interest to the purchase date (or 100% of the
accreted value plus accrued and unpaid interest and premium, if any, to the
purchase date in the case of original issue discount Debt); (3) third, to the
extent of any remaining Net Available Proceeds following the completion of the
Offer to Purchase, to the repayment of other Debt of the Company or Debt of a
Restricted Subsidiary, to the extent permitted under the terms thereof; and (4)
fourth, to the extent of any remaining Net Available Proceeds, to any other use
as determined by the Company which is not otherwise prohibited by this
Indenture.

SECTION 1019. Limitation on Issuances and Sales of Capital Stock of
-----------------------------------------------------
Restricted Subsidiaries.
- -----------------------

The Company shall not, and shall not permit any Restricted
Subsidiary to, issue, transfer, convey, sell or otherwise dispose of any shares
of Capital Stock of a Restricted Subsidiary or securities convertible or
exchangeable into, or options, warrants, rights or any other interest with
respect to, Capital Stock of a Restricted Subsidiary to any Person other than
the Company or a Restricted Subsidiary except: (i) a sale of all of the Capital
Stock of such Restricted Subsidiary owned by the Company and any Restricted
Subsidiary that complies with the provisions of Section 1018 to the extent such
provisions apply; (ii) in a transaction that results in such Restricted
Subsidiary becoming a Permitted Joint Venture, provided (x) such transaction
complies with the provisions of Section 1018 to the extent such provisions apply
and (y) the Company's remaining Investment in such Permitted Joint Venture would
have been permitted as a new Investment under the provisions of Section 1013;
(iii) the transfer, conveyance, sale or other disposition of shares required by
applicable law or regulation; (iv) if required, the issuance, transfer,
conveyance, sale or other disposition of directors' qualifying shares; or (v)
Disqualified Stock issued in exchange for, or upon conversion of, or the
proceeds of the issuance of which are used to redeem, refinance, replace or
refund, shares of Disqualified Stock of such Restricted Subsidiary, provided

57
<PAGE>

that the amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such Disqualified
Stock shall have redemption obligations no earlier than those required by, the
Disqualified Stock being exchanged, converted, redeemed, refinanced, replaced or
refunded.

SECTION 1020. Transactions with Affiliates and Related Persons.
------------------------------------------------

The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into any transaction (or series of related transactions)
with an Affiliate or Related Person of the Company (other than the Company or a
Restricted Subsidiary), including any Investment, unless such transaction is on
terms no less favorable to the Company or such Restricted Subsidiary than those
that could be obtained in a comparable arm's-length transaction with an entity
that is not an Affiliate or Related Person and is in the best interests of the
Company or such Restricted Subsidiary, provided that the Company or any
Restricted Subsidiary may enter into: (i) transactions pursuant to the
Company's tax sharing agreement entered into with Anschutz Company existing at
March 31, 1997, provided that any amendment of, supplement to or substitute for
such agreement is on terms that are no less favorable to the Company or such
Restricted Subsidiary than such existing agreement; (ii) transactions pursuant
to employee compensation arrangements approved by the Board of Directors, either
directly or indirectly; and (iii) Receivables Sales between the Company or a
Restricted Subsidiary and an Affiliate of the Company or such Restricted
Subsidiary, provided that such Receivables Sales satisfy the provisions of
clauses (i) and (ii) of Section 1018. For any transaction that involves in
excess of $10 million but less than or equal to $15 million, the Company shall
deliver to the Trustee an Officers' Certificate stating that the transaction
satisfies the above criteria. For any transaction that involves in excess of
$15 million, a majority of the disinterested members of the Board of Directors
shall determine that the transaction satisfies the above criteria and shall
evidence such a determination by a Board Resolution or, in the event that there
shall not be disinterested members of the Board of Directors with respect to the
transaction, the Company shall file with the Trustee a written opinion stating
that the transaction satisfies the above criteria from an investment banking
firm of national standing in the United States which, in the good faith judgment
of the Board of Directors, is independent with respect to the Company and its
Affiliates and qualified to perform such task.

SECTION 1021. Limitation on Designations of Unrestricted
------------------------------------------
Subsidiaries.
- ------------

The Company shall not designate any Subsidiary of the Company (other
than a newly created Subsidiary in which no Investment has previously been made)
as an Unrestricted Subsidiary (a "Designation") unless:

(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;

(b) immediately after giving effect to such Designation, the
Company would be able to Incur $1.00 of Debt under paragraph (a) of
Section 1011; and

(c) the Company would not be prohibited under any provision of
this Indenture from making an Investment at the time of Designation
(assuming the effectiveness of such Designation) in an amount (the
"Designation Amount") equal to the Fair Market Value of the net Investment
of the Company or any other Restricted Subsidiary in such Restricted
Subsidiary on such date.
58
<PAGE>

In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
1013 for all purposes of this Indenture in the Designation Amount. In addition,
neither the Company nor any Restricted Subsidiary shall at any time (x) provide
credit support for, or a guarantee of, any Debt of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such Debt),
provided that the Company or a Restricted Subsidiary may pledge Capital Stock or
Debt of any Unrestricted Subsidiary on a nonrecourse basis such that the pledgee
has no claim whatsoever against the Company other than to obtain such pledged
property, (y) be directly or indirectly liable for any Debt of any Unrestricted
Subsidiary or (z) be directly or indirectly liable for any Debt which provides
that the holder thereof may (upon notice, lapse of time or both) declare a
default thereon or cause the payment thereof to be accelerated or payable prior
to its final scheduled maturity upon the occurrence of a default with respect to
any Debt of any Unrestricted Subsidiary (including any right to take enforcement
action against such Unrestricted Subsidiary), except in the case of clause (x)
or (y) to the extent permitted under Section 1013 or 1020.

A Designation may be revoked (a "Revocation") by a Board Resolution,
provided that the Company shall not make any Revocation unless:

(a) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and

(b) all Liens and Debt of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time,
have been permitted to be Incurred at such time for all purposes of this
Indenture.

All Designations and Revocations must be evidenced by Board
Resolutions certifying compliance with the foregoing provisions.

SECTION 1022. No Repayment of Existing Parent Company Advances with
-----------------------------------------------------
the Proceeds of the Securities.
- ------------------------------

The Company shall not apply any portion of the proceeds of the
offering of the Securities toward the repayment of advances made to the Company
or any of its subsidiaries by any parent company of the Company outstanding at
March 31, 1997.

SECTION 1023. Waiver of Certain Covenants.
---------------------------

The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1007 through 1022, inclusive,
if before or after the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities, by Act of such
Holders, waive such compliance in such instance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.

SECTION 1024. Trustee Not to Monitor Performance.
----------------------------------

59
<PAGE>

The Trustee shall have no duty to confirm or monitor the performance
by the Company of its duties pursuant to the covenants set forth in this Article
Ten.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Right of Redemption.
-------------------

The Securities will be subject to redemption at the option of the
Company, in whole or in part, at any time or from time to time on or after April
1, 2002, upon not less than 30 nor more than 60 days' prior notice, subject to
the conditions and at the redemption prices (expressed as percentages of
principal amount) set forth in the form of Security, plus accrued and unpaid
interest thereon (if any) to the Redemption Date.

SECTION 1102. Applicability of Article.
------------------------

Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article.

SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------

The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 1104.

SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------

If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal of Securities; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Security not
redeemed to less than $1,000.

The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.

SECTION 1105. Notice of Redemption.
--------------------

Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed.

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<PAGE>

Each notice of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in Section 1107, if any,

(3) if less than all Outstanding Securities are to be redeemed,
the identification (and, in the case of a partial redemption, the
principal amounts) of the particular Securities to be redeemed,

(4) in case any Security is to be redeemed in part only, that on
and after the Redemption Date, upon surrender of such Security, the Holder
will receive, without charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,

(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Security, or the
portion thereof, to be redeemed, and that interest thereon will cease to
accrue on and after said date, and

(6) the place or places where such Securities are to be presented
and surrendered for payment of the Redemption Price and accrued interest,
if any.

Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

SECTION 1106. Deposit of Redemption Price.
---------------------------

Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and accrued interest on, all
the Securities which are to be redeemed on that date.

SECTION 1107. Securities Payable on Redemption Date.
-------------------------------------

Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest, if any, to
the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.

If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.

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<PAGE>

SECTION 1108. Securities Redeemed in Part.
---------------------------

Any Security which is to be redeemed only in part shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE TWELVE

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1201. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
- ----------

The Company may, at its option by Board Resolution, at any time,
with respect to the Securities, elect to have either Section 1202 or
Section 1203 be applied to all Outstanding Securities upon compliance with the
conditions set forth below in this Article Twelve.

SECTION 1202. Defeasance and Discharge.
------------------------

Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1202, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding Securities on
the date the conditions set forth in Section 1204 are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by the
Outstanding Securities, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 1205 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Securities to receive, solely from the trust fund
described in Section 1204 and as more fully set forth in such Section, payments
in respect of the principal of, premium, if any, and interest on such Securities
when such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (D) this
Article Twelve. Subject to compliance with this Article Twelve, the Company may
exercise its option under this Section 1202 notwithstanding the prior exercise
of its option under Section 1203 with respect to the Securities.

SECTION 1203. Covenant Defeasance.
-------------------

Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1203, the Company shall be released from its
obligations under any covenant contained in Section 801(4) and in Sections 1007
through 1021 with respect to the Outstanding Securities on and after the date
the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities shall thereafter be deemed not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such

62
<PAGE>

covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the Outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 501(3), 501(4) or 501(5), but, except as specified above, the remainder
of this Indenture and such Securities shall be unaffected thereby.

SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------

The following shall be the conditions to application of either
Section 1202 or Section 1203 to the Outstanding Securities:

(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 608 who shall agree to comply with the provisions of this
Article Twelve applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities:
(A) money in an amount, or (B) Government Securities which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment in respect of the Securities, money in an
amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of (and premium, if any) and
interest on the Outstanding Securities on the Stated Maturity (or
Redemption Date, if applicable) of such principal (and premium, if any) or
installment of interest; provided that the Trustee shall have been
irrevocably instructed in writing to apply such money or the proceeds of
such Government Securities to said payments with respect to the
Securities. Before such a deposit, the Company may give to the Trustee,
in accordance with Section 1103, a notice of its election to redeem all of
the Outstanding Securities at a future date in accordance with
Article Eleven, which notice shall be irrevocable. Such irrevocable
redemption notice, if given, shall be given effect in applying the
foregoing.

(2) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as paragraphs (8) and (9) of Section 501 are concerned, at any
time during the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).

(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound.

(4) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since March 25, 1997 there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the

63
<PAGE>

Holders of the Outstanding Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred.

(5) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.

(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under
Section 1202 or the covenant defeasance under Section 1203 (as the case
may be) have been complied with.

SECTION 1205. Deposited Money and Government Securities to Be Held
----------------------------------------------------
in Trust; Other Miscellaneous Provisions.
- ----------------------------------------

Subject to the provisions of the last paragraph of Section 1003, all
money and Government Securities (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
Outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee and (if applicable)
its officers, directors, employees and agents against any tax, fee or other
charge imposed on or assessed against the Government Securities deposited
pursuant to Section 1204 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the Outstanding Securities.

Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Securities held by it as provided in
Section 1204 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article Twelve.

SECTION 1206. Reinstatement.
-------------

If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1205 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1202 or 1203, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 1205; provided, however, that if the Company makes any payment of

64
<PAGE>

principal of, premium, if any, or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held by
the Trustee or Paying Agent.

65
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.

QWEST COMMUNICATIONS INTERNATIONAL INC.

By:___/s/______________________
Title:

Attest:___/s/______________________
Title:

BANKERS TRUST COMPANY, as Trustee

By:___/s/______________________
Title:
<PAGE>

EXHIBIT A

Form of Face of Security
------------------------

[If a Global Security, then insert:] THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A
SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

[If a Global Security, then insert:] UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

QWEST COMMUNICATIONS
INTERNATIONAL INC.

10 7/8% Series B Senior Note Due 2007

No. __________ $________

Qwest Communications International Inc., a Delaware corporation
(herein called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _________________, or registered assigns, the principal sum of
____________________ Dollars [if a Global Security, then insert: (which
principal amount may from time to time be increased or decreased to such other
principal amounts which, taken together with the principal amounts of all other
Outstanding Securities, shall not exceed $__________ in the aggregate at any
time, by adjustments made on the records of the Trustee hereinafter referred to
in accordance with the Indenture)] on April 1, 2007, at the office or agency of
the Company referred to below, and to pay interest thereon, semiannually on
April 1 and October 1 in each year, commencing on October 1, 1997, accruing from
March 31, 1997 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for under this Security or any Old Securities
exchanged for this Security, at the rate of 10 % per annum, until the principal
hereof is paid or duly provided for, and (to the extent lawful) to pay on demand
interest on any overdue interest at the rate borne by the Securities from the
date on which such overdue interest becomes payable to the date payment of such
interest has been made or duly provided for.

The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 15 or September 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
<PAGE>

payable to the Holder on such Regular Record Date, and such defaulted interest,
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities, may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in said Indenture. Payment
of the principal of (and premium, if any, on) and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
The City of New York, or at such other office or agency of the Company as may be
maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register.

Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.

Dated: QWEST COMMUNICATIONS
-------------------- INTERNATIONAL INC.

By:
---------------------------
Authorized Signatory

Attest:
-------------------

A-2
<PAGE>

Form of Reverse of Security
---------------------------
This Security is one of a duly authorized issue of securities of the
Company designated as its 10 % Series B Senior Notes Due 2007 (herein called
the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $250,000,000, which may be
issued under an indenture (herein called the "Indenture") dated as of ________,
1997 between the Company and Bankers Trust Company, trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.

The Securities are subject to redemption at the option of the
Company, in whole or in part, at any time or from time to time on or after April
1, 2002, upon not less than 30 nor more than 60 days' prior notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon (if any) to the redemption date,
if redeemed during the twelve months beginning April 1 of the years indicated
below:

Year Redemption Price
---- ----------------
2002 . . . . . . . . . . . . . . . 105.438%
2003 . . . . . . . . . . . . . . . 103.625%
2004 . . . . . . . . . . . . . . . 101.813%
2005 and thereafter. . . . . . . . 100.000%

In addition, prior to April 1, 2000, the Company may redeem up to
35% of the originally issued principal amount of Securities at a redemption
price equal to 110.875% of the principal amount of the Securities so redeemed,
plus accrued and unpaid interest thereon (if any) to the redemption date, with
the net proceeds of one or more Public Equity Offerings resulting in gross
proceeds of at least $100 million in the aggregate; provided that at least 65%
of the originally issued principal amount of the Securities would remain
outstanding immediately after giving effect to such redemption.

Upon the occurrence of a Change of Control, the Holder of this
Security may require the Company, subject to certain limitations provided in the
Indenture, to repurchase this Security at a purchase price in cash in an amount
equal to 101% of the principal amount thereof plus accrued and unpaid interest.

In the case of any redemption of Securities, interest installments
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Date referred to on the face
hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date.

In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.

If an Event of Default shall occur and be continuing, the principal
of all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.

The Indenture contains provisions for defeasance at any time of
(a) the entire indebtedness of the Company on this Security and (b) certain

A-3
<PAGE>

restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.

The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security.

No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place, and rate,
and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose in
The City of New York, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.

The Securities are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.

No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

Prior to the time of due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.

All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

A-4
<PAGE>

A-5
<PAGE>

Form of Trustee's Certificate of Authentication
-----------------------------------------------

The Trustee's certificate of authentication shall be in
substantially the following form:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

Dated: ____________________

This is one of the Securities referred to in the within-mentioned
Indenture.

[NAME OF TRUSTEE]
as Trustee

By:_________________________
Authorized Signatory

A-6
<PAGE>

Assignment Form
---------------

If you, the holder, want to assign this Security, fill in the form
below and have your signature guaranteed:

I or we assign and transfer this Security to ___________________________________

________________________________________________________________________________

(Insert assignee's social security or tax ID number)____________________________

(Print or type assignee's name, address and zip code)___________________________
______________________________________
______________________________________

and irrevocably appoint ________________________________
of ________________________________
________________________________

agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.

________________________________________________________________________________

Dated:_________________ Your signature:___________________________________
(Sign exactly as your name appears on the other
side of this Security)

By:____________________________________________________
NOTICE: To be executed by an executive officer

Signature Guarantee:__________________________

A-7
<PAGE>

Option of Holder to Elect Purchase
----------------------------------

If you wish to have this Security purchased by the Company pursuant
to Section 1010 or 1018 of the Indenture, check the box:

If you wish to have a portion of this Security purchased by the
Company pursuant to Section 1010 or 1018 of the Indenture, state the amount:
$_____________

Dated:______________________ Your Signature:_____________________________
(Sign exactly as your name appears on
the other side of this Security)

<PAGE>

Exhibit 5.1
June 30, 1997

Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Qwest Communications International Inc.
Form S-4 Registration Statement Filed June 30, 1997

Ladies and Gentlemen:

As counsel for Qwest Communications International Inc., a Delaware
corporation (the "Company"), we have examined the above-referenced Registration
Statement on Form S-4 under the Securities Act of 1933, as amended (the
"Registration Statement"), which the Company has filed covering the exchange of
the Company's 10 7/8% Series B Senior Notes Due 2007(the "Exchange Notes") for
its outstanding 10 7/8% Senior Notes Due 2007(the "Old Notes")

We have examined the Company's Amended and Restated Certificate of
Incorporation, By-Laws and the record of its corporate proceedings and have made
such other investigation as we have deemed necessary in order to express the
opinions set forth below.

Based on such investigation, it is our opinion that the Exchange Notes, when
sold as described in the prospectus included in the Registration Statement, will
be legally issued, fully paid and non-assessable.

We hereby consent to all references to us in the Registration Statement and
all amendments to the Registration Statement. We further consent to the use of
this opinion as an exhibit to the Registration Statement.

HOLME ROBERTS & OWEN LLP

By: /s/ Martha Dugan Rehm
------------------------
Martha Dugan Rehm

<PAGE>

EXHIBIT 8

June 30, 1997

Qwest Communications International Inc.
555 Seventeenth Street, Suite 1000
Denver, Colorado 80202

Re: 10-7/8% Series B Senior Notes Due 2007
Form S-4 Registration Statement
Filed June 30, 1997

Ladies and Gentlemen:

This opinion is given in connection with the proposed offering by Qwest
Communications International Inc., a Delaware corporation (the "Company"), of
its 10-7/8% Series B Senior Notes Due 2007 in exchange for its 10-7/8% Senior
Notes Due 2007 issued on March 31, 1997, as described in the registration
statement on Form 4 to be filed with the Securities and Exchange Commission on
June 30, 1997 (the "Registration Statement"). Capitalized terms used in this
letter that are not otherwise defined herein have the same meaning given to them
in the Registration Statement.

Our opinion is based on the current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the applicable Treasury regulations
("Regulations"), and public administrative and judicial interpretations of the
Code and Regulations, all of which are subject to change, which changes could be
applied retroactively. Our opinion also is based on the facts set forth in the
Registration Statement, the Note Documents (as that term is defined in the
representation letter, dated June 30, 1997, from you), which we assume set forth
the complete agreement among the parties with respect to the Notes), and on
certain representations from you with respect to factual matters, which
representations we have not independently verified. We assume that all Note
Documents have been or will be properly executed and will be valid and binding
when executed.

We have prepared the discussion included in the Registration Statement under the
caption "Certain United States Federal Income Tax Considerations." It is our
opinion that the discussion under that caption describes the material United
States federal income tax consequences expected to result to the Holders,
subject to the conditions, limitations, and assumptions described therein.
<PAGE>

The discussion does not cover all aspects of federal taxation that may be
relevant to, or the actual tax effect that any of the matters described therein
will have on, any particular Holder, and it does not address foreign, state, or
local tax consequences. The discussion does not cover the tax consequences that
might be applicable to Holders that are subject to special rules under the Code
(including insurance companies, tax-exempt organizations, mutual funds,
retirement plans, financial institutions, dealers in securities or foreign
currency, persons that hold the Notes as part of a "straddle" or as a "hedge"
against currency risk or in connection with a conversion transaction, persons
that have a functional currency other than the United States dollar, investors
in pass-through entities, and except as expressly addressed therein, Non-U.S.
Holders). The discussion does not address the federal income tax consequences
that may result from a modification of the Notes.

Our opinion may change if the applicable law changes, if any of the facts with
respect to the Notes (as included in the Registration Statement, the Note
Documents, and the representations made by you) are inaccurate, incomplete or
change, or if the conduct of the parties is materially inconsistent with the
facts reflected in the Registration Statement, the Note Documents, or the
representations.

Our opinion represents only our legal judgment based on current law and the
facts as described above. Our opinion has no binding effect on the Internal
Revenue Service or the courts. The Service may take a position contrary to our
opinion, and if the matter is litigated, a court may reach a decision contrary
to the opinion.

We hereby consent to the filing of this opinion letter with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the use
of our name therein.

Very truly yours,

HOLME ROBERTS & OWEN LLP

By:/s/ Robert J. Welter
---------------------------
Robert J. Welter, Partner

<PAGE>
EXHIBIT 12.1

QWEST COMMUNICATIONS INTERNATIONAL INC.
CALCULATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
(AMOUNTS IN THOUSANDS, EXCEPT FOR RATIOS)
(UNAUDITED)

Three Months
Ended March 31, Year Ended December 31,
-------------------------- -----------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------------------------- -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes $ (7,234) $ (15,289) $ (10,201) $ (38,467) $ (10,685) $111,711 $ (8,562)
Add:
Interest on debt, net of
capitalized interest 984 1,351 6,827 4,248 219 3,319 2,779
Interest expense portion of
rental expense 429 370 1,666 1,548 1,049 1,168 825
Amortization of financing costs 47 62 234 57 - - -
-------------------------- -----------------------------------------------------------
Earnings available for fixed
charges $ (5,774) $ (13,506) $ (1,474) $ (32,614) $ (9,417) $116,198 $ (4,958)
========================== ===========================================================
Fixed Charges:
Interest on debt $ 2,696 $ 1,881 $ 9,192 $ 6,104 $ 502 $ 3,319 $ 2,779
Amortization of financing costs 47 62 234 57 - - -
Interest expense portion of
rental expense 429 370 1,666 1,548 1,049 1,168 825
Preferred stock dividend - - - - - 15,981 5,912
-------------------------- -----------------------------------------------------------
Total fixed charges $ 3,172 $ 2,313 $ 11,092 $ 7,709 $ 1,551 $ 20,468 $ 9,516
========================== ===========================================================
Ratio of earnings to fixed charges - - - - - 5.68 -
Deficiency $ (8,946) $ (15,819) $ (12,566) $ (40,323) $ (10,968) $ - $(14,474)
</TABLE>

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS'

The Board of Directors
Qwest Communications International Inc.:

We consent to the use of our report, dated February 19, 1997, except as to
note 1, paragraph (i) and note 18, which are as of May 23, 1997, relating to the
consolidated balance sheets of Qwest Communications International Inc. and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, stockholder's equity and cash flows for each of the
years in the three-year period ended December 31, 1996, included herein, and the
incorporation by reference, herein, of our report, dated February 19, 1997,
except as to note 2, which is as of May 23, 1997, pertaining to the related
consolidated financial statement schedules, which report appears in the
registration statement on Form S-1 (No. 333-25391) of Qwest Communications
International Inc., and to the reference to our firm under the headings "Summary
Consolidated Financial and Operating Data," "Selected Consolidated Financial
Data" and "Experts" in the registration statement.

KPMG Peat Marwick LLP

Denver, Colorado
June 27, 1997

<PAGE>

EXHIBIT 25

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

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------------
FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) ___________

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

BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)

NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)

FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)

BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
<PAGE>

(Name, address and telephone number of agent for service)

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

QWEST COMMUNICATIONS INTERNATIONAL, INC.
(Exact name of obligor as specified in its charter)

DELAWARE 84-0978360
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)

555 SEVENTEENTH STREET
DENVER, CO 80202
(Address of principal executive offices) (Zip Code)

10-7/8% SENIOR NOTES DUE 2007
(Title of the indenture securities)

ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.

(a) Name and address of each examining or supervising authority
to which it is subject.

NAME ADDRESS
---- -------

Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

ITEM 2. AFFILIATIONS WITH OBLIGOR.

If the obligor is an affiliate of the Trustee, describe each such
affiliation.

None.

ITEM 3. -15. NOT APPLICABLE

ITEM 16. LIST OF EXHIBITS.

EXHIBIT 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of
Amendment of the Organization Certificate of
Bankers Trust Company dated June 21, 1995 -
<PAGE>

Incorporated herein by reference to Exhibit 1
filed with Form T-1 Statement, Registration No.
33-65171, and Certificate of Amendment of the
Organization Certificate of Bankers Trust Company
dated March 20, 1996, copy attached.

EXHIBIT 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2
filed with Form T-1 Statement, Registration No.
33-21047.

EXHIBIT 3 - Authorization of the Trustee to exercise corporate
trust powers - Incorporated herein by reference to
Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.

EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, dated
as amended on February 18, 1997. - Incorporated
herein by reference to Exhibit 4 filed with
Form T-1 Statement, Registration No. 333-24509-01.

EXHIBIT 5 - Not applicable.

EXHIBIT 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. - Incorporated herein
by reference to Exhibit 4 filed with Form T-1
Statement, Registration No. 22-18864.

EXHIBIT 7 - A copy of the latest report of condition of
Bankers Trust Company dated as of
December 31, 1996.

EXHIBIT 8 - Not Applicable.

EXHIBIT 9 - Not Applicable.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
<PAGE>

authorized, all in The City of New York, and State of New York, on the 17th day
of June, 1996.

BANKERS TRUST COMPANY

By: /s/ Kevin Weeks
---------------
Kevin Weeks
Assistant Treasurer
<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: 0 0 6 2 3
</TABLE>

CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS DECEMBER 31, 1996

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.

SCHEDULE RC--BALANCE SHEET

<TABLE>
<CAPTION>
--------------------------------
C400
--------------------------------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
/ / / / / / / / / / / / / / / / / /
1. Cash and balances due from depository institutions (from Schedule RC-A): / / / / / / / / / / / / / / / / / /
a. Noninterest-bearing balances and currency and coin(1)................... 0081 1,545,000 1.a.
b. Interest-bearing balances(2)............................................ 0071 2,494,000 1.b.
2. Securities: / / / / / / / / / / / / / / / / / /
a. Held-to-maturity securities (from Schedule RC-B, column A).............. 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 4,368,000 2.b.
3. Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries, / / / / / / / / / / / / / / / / / /
and in IBFs: / / / / / / / / / / / / / / / / / /
a. Federal funds sold...................................................... 0276 3,651,000 3.a.
b. Securities purchased under agreements to resell......................... 0277 3,230,000 3.b.
4. Loans and lease financing receivables: / / / / / / / / / / / / / / / / / /
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
a. Loans and leases, net of unearned income
(from Schedule RC-C)..............................RCFD 2122 24,849,000 / / / / / / / / / / / / / / / / / / 4.a.
b. LESS: Allowance for loan and lease losses.........RCFD 3123 923,000 / / / / / / / / / / / / / / / / / / 4.b.
c. LESS: Allocated transfer risk reserve.............RCFD 3128 0 / / / / / / / / / / / / / / / / / / 4.c.
d. Loans and leases, net of unearned income, / / / / / / / / / / / / / / / / / /
allowance, and reserve (item 4.a minus 4.b and 4.c)..................... 2125 28,889,000 4.d.
5. Assets held in trading accounts.............................................. 3545 38,272,000 5.
6. Premises and fixed assets (including capitalized leases)..................... 2145 914,000 6.
7. Other real estate owned (from Schedule RC-M)................................. 2150 213,000 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M)......................................................... 2130 184,000 8.
9. Customers' liability to this bank on acceptances outstanding................. 2155 597,000 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 17,000 10.
11. Other assets (from Schedule RC-F)........................................... 2160 6,056,000 11.
12. Total assets (sum of items 1 through 11).................................... 2170 90,430,000 12.
------------------------------------------------
</TABLE>

- --------------------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.

<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 6/30/96 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State ZIP: New York, NY 10006 12
FDIC Certificate No.: 0 0 6 2 3
</TABLE>

SCHEDULE RC--CONTINUED

<TABLE>
<CAPTION>
--------------------------------------------
Dollar Amounts in Thousands / / / / / / / / Bil Mil Thou
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES / / / / / / / / / / / / / / / / / / / / / / / /
13. Deposits: / / / / / / / / / / / / / / / / / / / / / / /
a. In domestic offices (sum of totals
of columns A and C from Schedule
RC-E, part I)................................ RCON 2200 11,985,000 13.a.
(1) Noninterest-
bearing(1)......RCON 6631 3,569,000.... / / / / / / / / / / / / / / / / / / / / / / / 13.a.(1)
(2) Interest-
bearing.........RCON 6636 5,471,000.... / / / / / / / / / / / / / / / / / / / / / / / 13.a.(2)
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule / / / / / / / / / / / / / / / / / / / / / / /
RC-E part II)............................... RCFN 2200 21,619,000 13.b.
(1) Noninterest-
bearing........RCFN 6631 494,000.... / / / / / / / / / / / / / / / / / / / / / / / 13.b.(1)
(2) Interest-
bearing........RCFN 6636 19,154,000.... / / / / / / / / / / / / / / / / / / / / / / / 13.b.(2)

14. Federal funds purchased and securities sold under / / / / / / / / / / / / / / / / / / / / / / /
agreements to repurchase in domestic offices of the bank / / / / / / / / / / / / / / / / / / / / / / /
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased...................... RCFD 0278 6,560,000 14.a.
b. Securities sold under agreements to
repurchase.................................. RCFD 0279 120,000 14.b.
15. a. Demand notes issued to the U.S. Treasury..... RCON 2840 0 15.a.
b. Trading liabilities.......................... RCFD 3548 19,172,000 15.b.
16. Other borrowed money: / / / / / / / / / / / / / / / / / / / / / / /
a. With original maturity of one year or less... RCFD 2332 5,909,000 16.a.
b. With original maturity of more than one year. RCFD 2333 3,097,000 16.b.
17. Mortgage indebtedness and obligations under
capitalized leases................................ RCFD 2910 31,000 17.
18. Bank's liability on acceptances executed and
outstanding....................................... RCFD 2920 597,000 18.
19. Subordinated notes and debentures................. RCFD 3200 1,229,000 19.
20. Other liabilities (from Schedule RC-G)............ RCFD 2930 5,235,000 20.
21. Total liabilities (sum of items 13 through 20).... RCFD 2948 85,554,000 21.
/ / / / / / / / / / / / / / / / / / / / / / /
22. Limited-life preferred stock and related surplus.. RCFD 3282 0 22.
EQUITY CAPITAL / / / / / / / / / / / / / / / / / / / / / / /
23. Perpetual preferred stock and related surplus..... RCFD 3838 600,000 23.
24. Common stock...................................... RCFD 3230 1,001,000 24.
25. Surplus (exclude all surplus related to preferred
stock)............................................ RCFD 3839 540,000 25.
26. a. Undivided profits and capital reserves....... RCFD 3632 3,131,000 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities................ RCFD 8434 (14,000) 26.b.
27. Cumulative foreign currency translation
adjustments....................................... RCFD 3284 (382,000) 27.
28. Total equity capital (sum of items 23 through 27). RCFD 3210 4,876,000 28.
29. Total liabilities, limited-life preferred stock, and / / / / / / / / / / / / / / / / / / / / / / /
equity capital (sum of items 21, 22, and 28)...... RCFD 3300 90,430,000 29.
---------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement
below that best describes the most comprehensive level of
Number
auditing work performed for the bank by independent external
------------
auditors as of any date during 1995............... RCFD 6724 RCFD 2 M.1
</TABLE>

- --------------------------
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm
which submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company auditors (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work

- --------------------------
(1) Including total demand deposits and noninterest-bearing time and savings
deposits.

STATE OF NEW YORK,

BANKING DEPARTMENT

I, PETER M. PHILBIN, Deputy Superintendent of Bank of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated March 20, 1996, providing for an increase in
authorized capital stock from $1,351,666,670 consisting of 85,166,667 shares
with a par value of $10 each designated as Common Stock and 500 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$1,501,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.

WITNESS, MY HAND AND OFFICIAL SEAL OF THE BANKING DEPARTMENT AT THE CITY OF
NEW
<PAGE>

YORK, THIS 21ST DAY OF MARCH IN THE YEAR OF OUR LORD ONE THOUSAND NINE HUNDRED
AND NINETY-SIX.

Peter M. Philbin
---------------------------------
DEPUTY SUPERINTENDENT OF BANKS

CERTIFICATE OF AMENDMENT

OF THE

ORGANIZATION CERTIFICATE

OF BANKERS TRUST

Under Section 8005 of the Banking Law

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

We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby
certify:

1. The name of the corporation is Bankers Trust Company.

2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.

3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.

4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock
outstanding, which reads as follows:

"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Three Hundred Fifty One Million, Six Hundred
Sixty-Six Thousand, Six Hundred Seventy Dollars ($1,351,666,670),
divided into Eighty-Five Million, One Hundred Sixty-Six Thousand, Six
Hundred Sixty-Seven (85,166,667) shares with a par value of $10 each
designated as Common Stock and 500 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."

is hereby amended to read as follows:

"III. The amount of capital stock which the corporation is hereafter
to have is One Billion, Five Hundred One Million, Six Hundred Sixty-
<PAGE>

Six Thousand, Six Hundred Seventy Dollars ($1,501,666,670), divided into One
Hundred Million, One Hundred Sixty Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common Stock
and 500 shares with a par value of One Million Dollars ($1,000,000) each
designated as Series Preferred Stock."

6. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.

IN WITNESS WHEREOF, we have made and subscribed this certificate this 20th
day of March , 1996.

James T. Byrne, Jr.
----------------------------------
James T. Byrne, Jr.
Managing Director

Lea Lahtinen
----------------------------------
Lea Lahtinen
Assistant Secretary

State of New York )
) ss:
County of New York )

Lea Lahtinen, being fully sworn, deposes and says that she is an Assistant
Secretary of Bankers Trust Company, the corporation described in the foregoing
certificate; that she has read the foregoing certificate and knows the contents
thereof, and that the statements herein contained are true.

Lea Lahtinen
------------------------
Lea Lahtinen

Sworn to before me this 20th day
of March, 1996.

Sandra L. West
- ---------------------------
Notary Public

SANDRA L. WEST
Notary Public State of New York Counterpart filed in the
No. 31-4942101 Office of the Superintendent of
Qualified in New York County Banks, State of New York,
Commission Expires September 19, 1996 This 21st day of March, 1996

<PAGE>

EXHIBIT 99.1

LETTER OF TRANSMITTAL

QWEST COMMUNICATIONS INTERNATIONAL INC.

OFFER TO EXCHANGE

10-7/8% SERIES B SENIOR NOTES DUE 2007
FOR ANY AND ALL OF ITS OUTSTANDING
10-7/8% SENIOR NOTES DUE 2007
PURSUANT TO THE PROSPECTUS, DATED ______ __, 1997

- -------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________,
1997 UNLESS EXTENDED ("THE EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------

TO: Bankers Trust Company of New York, EXCHANGE AGENT

BY MAIL: BY HAND:

BY OVERNIGHT MAIL OR COURIER:

BT Services Tennessee, Inc.
Corporate Trust and Agency Group
Reorganization Unit
648 Grassmere Park Road

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE>

The undersigned acknowledges that he or she has received the
Prospectus, dated _________, 1997 (the "Prospectus"), of Qwest Communications
International Inc., a Delaware corporation ("Qwest"), and this Letter of
Transmittal (the "Letter"), which together constitute Qwest's offer (the
"Exchange Offer") to exchange $1,000 principal amount of its 10-7/8% Series B
Senior Notes due 2007 (the "Exchange Notes") for each $1,000 principal amount
of its outstanding 10-7/8% Senior Notes due 2007 (the "Old Notes") of which
$250 million in aggregate principal amount are outstanding from the holders
thereof.

The Exchange Notes will bear interest at the same rate and on the same
terms as the Old Notes. Consequently, interest on the Exchange Notes will
accrue at the rate of 10-7/8% per annum and will be payable semiannually in
arrears on April 1 and October 1 of each year, commencing October 1, 1997.
Interest on each Exchange Note will accrue from the last interest payment date
on which interest was paid on the surrendered Old Note or, if no interest has
been paid on such Old Note, from the date of issuance of the Old Notes.
Consequently, Holders whose Old Notes are accepted for exchange will be deemed
to have waived the right to receive any accrued but unpaid interest on the Old
Notes.

This Letter is to be completed by a holder of Old Notes either if
certificates are to be forwarded herewith or if a tender of certificates for
Old Notes, if available, is to be made by book-entry transfer to the account
maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Exchange Offer--Guaranteed Delivery Procedures" section of the Prospectus.
Holders of Old Notes whose certificates are not immediately available, or who
are unable to deliver their certificates or confirmation of the book-entry
tender of their Old Notes into the Exchange Agent's account at the Book-Entry
Transfer Facility (a "Book-Entry Confirmation") and all other documents
required by this Letter to the Exchange Agent on or prior to the Expiration
Date, must tender their Old Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures"
section of the Prospectus. See Instruction 1. Delivery of Documents to the
Book-Entry Transfer Facility does not constitute delivery to the Exchange
Agent.

Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder of Old Notes promptly and
instruct such registered holder of Old Notes to tender on behalf of the
beneficial owner. If such beneficial owner wishes to tender on its own behalf,
such beneficial owner must, prior to completing and executing this Letter and
delivering its Old Notes, either make appropriate arrangements to register
ownership of the Old Notes in such beneficial owner's name or obtain a properly
completed power of attorney power from the registered holder of Old Notes. The
transfer of record ownership may take considerable time.

The undersigned has completed the appropriate boxes below and signed
this letter to indicate the action the undersigned desires to take with respect
to the Exchange Offer.

List below the Old Notes to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and aggregate principal
amount of the Old Notes should be listed on a separate signed schedule affixed
hereto.
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF
OLD NOTES 1 2 3
- ------------------------------------------------------------------------------------------------------------------------------
Aggregate Principal
Amount Aggregate Principal
Name(s) and Address(es) of Registered Holder(s) Certificate of 10 7/8% Senior Notes Amount
(Please fill in, if blank) Number(s)* due 2007 Tendered**
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------------------------------

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

------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

- -------------------------------------------------------------------------------
* Need not be completed if Old Notes are being tendered by book-entry
transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have
tendered ALL of the Old Notes represented by the Old Notes indicated in
column 2. See Instruction 2.
- -------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:

Name of Tendering Institution
-----------------------------------------
Account Number Transaction Code Number
---------------- --------------

[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT
AND COMPLETE THE FOLLOWING:

Names(s) of Registered Holder(s)

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

Window Ticket Number (if any)

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

Date of Execution of Notice of Guaranteed Delivery

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

Name of Institution which guaranteed delivery

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

IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:

Account Number
-------------------------
Transaction Code Number
--------------------------

[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE
ADDITIONAL COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.

Name:
<PAGE>

-----------------------------------------------------------------------
Address:
--------------------------------------------------------------------

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to Qwest the aggregate specified amount of Old Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
the Old Notes tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, Qwest all right, title and interest in and
to such Old Notes as are being tendered hereby, and hereby appoints the Exchange
Agent as the true and lawful agent and attorney-in-fact (with full knowledge
that the Exchange Agent also acts as agent of Qwest) of such holder of Old
Notes, (i) to transfer ownership of such Old Notes on the account books
maintained by The Depositary Trust Company (together, in any such case, with all
accompanying evidences of transfer and authenticity) to Qwest and (ii) to
receive all benefits and otherwise exercise all rights and incidents of
beneficial ownership with respect to such Old Notes, all in accordance with the
terms of the Exchange Offer. The power of attorney granted in this paragraph
shall be deemed to be irrevocable and coupled with an interest.

The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the Old
Notes tendered hereby and that Qwest will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim when the same is accepted by Qwest. The
undersigned hereby further represents that any Exchange Notes acquired in
exchange for Old Notes tendered hereby will have been acquired in the ordinary
course of business of the person receiving such Exchange Notes, whether or not
such person is the undersigned, that neither the holder of such Old Notes nor
any such other person has an arrangement or understanding with any person to
participate in the distribution of such Exchange Notes and that neither the
holder of such Old Notes nor any such other person is an "affiliate," as
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act"), of Qwest.

The undersigned also acknowledges that this Exchange Offer is being
made based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission") which lead Qwest to believe that the Exchange
Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may
be offered for resale, resold and otherwise transferred by holders thereof
(other than any such holder that is an "affiliate" of Qwest within the meaning
of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that such Exchange Notes are acquired in the ordinary course of such
holders' business and such holders have no arrangement with any person to
participate in the distribution of such Exchange Notes. If the undersigned is
a broker-dealer that will receive Exchange Notes for its own account in
exchange for Old Notes, it represents that the Old Notes to be exchanged for
the Exchange Notes were acquired by it as a result of market-making activities
or other trading activities and acknowledges that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale
<PAGE>

of such Exchange Notes pursuant to the Exchange Offer; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
If any holder is an affiliate of Qwest or is engaged in or has any arrangement
or understanding with respect to the distribution of the Exchange Notes to be
acquired pursuant to the Exchange Offer, such holder (i) could not rely on the
applicable interpretations of the staff of the Commission and (ii) must comply
with the registration and prospectus delivery requirements of the Securities
Act.

The undersigned will, upon request, execute and deliver any additional
documents deemed by Qwest to be necessary or desirable to complete the sale,
assignment and transfer of the Old Notes tendered hereby. All authority
conferred or agreed to be conferred in this Letter and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of
the undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in
accordance with the procedures set forth in "The Exchange Offer--Withdrawal
Rights" section of the Prospectus.

Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Old Notes (and, if applicable,
substitute certificates representing Old Notes for any Old Notes not exchanged)
in the name of the undersigned or, in the case of a book-entry delivery of Old
Notes, please credit the account indicated above maintained at the Book-Entry
Transfer Facility. Similarly, unless otherwise indicated under the box entitled
"Special Delivery Instructions" below, please send the Exchange Notes (and, if
applicable, substitute certificates representing Old Notes for any Old Notes not
exchanged) to the undersigned at the address shown above in the box entitled
"Description of Old Notes."

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD
NOTES AS SET FORTH IN SUCH BOX ABOVE.
<PAGE>

<TABLE>
- ------------------------------------------------------------- -----------------------------------------------------------------
<S> <C>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4) (SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Old To be completed ONLY if certificates for Old Notes not
Notes not exchanged and/or Exchange Notes are to be issued in exchanged and/or Exchange Notes are to be sent to someone
the name of and sent to someone other than the person or other than the person or persons whose signature(s)
persons whose signature(s) appear(s) on this Letter above, or appear(s) on this Letter above or to such person or persons
if Old Notes delivered by book-entry transfer which are not at an address other than shown in the box entitled
accepted for exchange are to be returned by credit to an "Description of Old Notes" on this Letter above.
account maintained at the Book-Entry Transfer Facility other
than the account indicated above.

Issue: Exchange Notes and/or Old Notes to: Mail: Exchange Notes and/or Old Notes to:

Name(s) Name(s)
----------------------------------------------------- ---------------------------------------------------------
(PLEASE TYPE OR PRINT) (PLEASE TYPE OR PRINT)

- ------------------------------------------------------------- -----------------------------------------------------------------
(PLEASE TYPE OR PRINT) (PLEASE TYPE OR PRINT)

Address Address
----------------------------------------------------- ---------------------------------------------------------

- ------------------------------------------------------------- -----------------------------------------------------------------
(ZIP CODE) (ZIP CODE)

(COMPLETE SUBSTITUTE FORM W-9)

[ ] Credit unexchanged Old Notes delivered by book-entry
transfer to the Book-Entry Transfer Facility set forth
below.

- -----------------------------------------------------------------
(Book-Entry Transfer Facility
Account Number, if applicable)
- ----------------------------------------------------------------- --------------------------------------------------------------
</TABLE>
<PAGE>

IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES
FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR
THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR
TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
<PAGE>

- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Dated: 1997
---------------------------------------------------------
X 1997
------------------------------------------------------------
X 1997
------------------------------------------------------------
SIGNATURE(S) OF OWNER DATE

Area Code and telephone Number . . . . . . . . . . . . . .

If a holder is tendering any Old Notes, this Letter must be signed by
the registered holder(s) as the name(s) appear(s) on the certificate(s) for the
Old Notes or by any person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, officer or other person acting in a fiduciary
or representative capacity, please set forth full title. See Instruction 3.

Name(s):
-----------------------------------------------

-----------------------------------------------------
(PLEASE TYPE OR PRINT)

Capacity:
--------------------------------------------
Address:
--------------------------------------------

-----------------------------------------------------
(INCLUDING ZIP CODE)
SIGNATURE GUARANTEE
(REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution:
-----------------------------
(AUTHORIZED SIGNATURE)
<PAGE>

-----------------------------------------------------
(TITLE)
-----------------------------------------------------
(NAME AND FIRM)
-----------------------------------------------------
Dated: , 1997
------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER OF
10-7/8% SERIES B SENIOR NOTES DUE 2007
FOR ANY AND ALL OF ITS OUTSTANDING
10-7/8% SENIOR NOTES DUE 2007
OF QWEST COMMUNICATIONS INTERNATIONAL INC.

1. DELIVERY OF THIS LETTER AND OLD NOTES; GUARANTEED DELIVERY
PROCEDURES.

This letter is to be completed by securityholders either if
certificates are to be forwarded herewith or if tenders are to be made pursuant
to the procedures for delivery by book-entry transfer set forth in "The Exchange
Offer--Book-Entry Transfer" section of the Prospectus. Certificates for all
physically tendered Old Notes, or Book-Entry Confirmation, as the case may be,
as well as a properly completed and duly executed Letter (or manually signed
facsimile hereof) and any other documents required by this Letter, must be
received by the Exchange Agent at the address set forth herein on or prior to
the Expiration Date, or the tendering holder must comply with the guaranteed
delivery procedures set forth below.

Securityholders whose certificates for Old Notes are not
immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date, or
who cannot complete the procedure for book-entry transfer on a timely basis, may
tender their Old Notes pursuant to the guaranteed delivery procedures set forth
in "The Exchange Offer--Guaranteed Delivery Procedures" section of the
Prospectus. Pursuant to such procedures, (i) such tender must be made through an
Eligible Institution, (ii) prior to the Expiration Date, the Exchange Agent must
receive from such Eligible Institution a properly completed and duly executed
Letter (or a facsimile thereof) and Notice of Guaranteed Delivery, substantially
in the form provided by Qwest (by telegram, telex, facsimile transmission, mail
or hand delivery), setting forth the name and address of the holder of Old Notes
and the amount of Old Notes tendered, stating that the tender is being made
thereby and guaranteeing that within five New York Stock Exchange ("NYSE")
trading days after the date of execution of the Notice of Guaranteed Delivery,
the certificates for all physically tendered Old Notes, or a Book-Entry
Confirmation, and any other documents required by the Letter will be deposited
by the Eligible Institution with the Exchange Agent, and (iii) the certificates
for all physically tendered Old Notes, in proper form for transfer, or Book-
Entry Confirmation, as the case may be, and all other documents required by this
Letter, are received by the Exchange Agent within five NYSE trading days after
the date of execution of the Notice of Guaranteed Delivery.

The method of delivery of this Letter, the Old Notes and all
other required documents is at the election and risk of the tendering holders,
but the delivery will be deemed made only when actually received or confirmed by
the Exchange Agent. If Old Notes are sent by mail, it is suggested that
registered mail, properly insured, with return receipt requested, be used and
that the mailing be made sufficiently in advance of the Expiration Date to
permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on
the Expiration Date.

See "The Exchange Offer" section of the Prospectus.
<PAGE>

2. PARTIAL TENDERS (NOT APPLICABLE TO SECURITYHOLDERS WHO TENDER
BY BOOK-ENTRY TRANSFER).

If less than all of the Old Notes evidenced by a submitted certificate is
to be tendered, the tendering holder(s) should fill in the aggregate principal
amount of Old Notes to be tendered in the box above entitled "Description of Old
Notes--Aggregate Amount Tendered." A reissued certificate representing the
balance of nontendered Old Notes will be sent to such tendering holder, unless
otherwise provided in the appropriate box on this Letter, promptly after the
Expiration Date. ALL OF THE OLD NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE
DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.

3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.

If this Letter is signed by the registered holder of the Old Notes
tendered hereby, the signature must correspond exactly with the name as written
on the face of the certificates without any change whatsoever.

If any tendered Old Notes are owned of record by two or more joint owners,
all of such owners must sign this Letter.

If any tendered Old Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter as there are different registrations of certificates.

When this Letter is signed by the registered holder or holders of the Old
Notes specified herein and tendered hereby, no endorsements of certificates or
separate bond powers are required. If, however, the Exchange Notes are to be
issued, or any untendered Old Notes are to be reissued, to a person other than
the registered holder, then endorsements of any certificates transmitted hereby
or separate bond powers are required. Signatures on such certificate(s) must be
guaranteed by an Eligible Institution.

If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.

If this Letter or any or any certificates or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by Qwest, proper
evidence satisfactory to Qwest of their authority to so act must be submitted.

ENDORSEMENTS ON CERTIFICATES FOR OLD NOTES OR SIGNATURES ON BOND POWERS
REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF
A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY
HAVING AN OFFICE OR CORRESPONDENT IN THE UNITED STATES (AN "ELIGIBLE
INSTITUTION").

SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN
<PAGE>

ELIGIBLE INSTITUTION, PROVIDED THE OLD NOTES ARE TENDERED: (i) BY A REGISTERED
HOLDER OF OLD NOTES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES
ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON
A SECURITY POSITION LISTING AS THE HOLDER OF SUCH OLD NOTES) WHO HAS NOT
COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR "SPECIAL DELIVERY
INSTRUCTIONS" ON THIS LETTER, OR (ii) FOR THE ACCOUNT OF AN ELIGIBLE
INSTITUTION.

4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.

Tendering holders of Old Notes should indicate in the
applicable box the name and address to which Exchange Notes issued pursuant to
the Exchange Offer and/or substitute certificates evidencing Old Notes not
exchange are to be issued or sent, if different from the name or address of the
person signing this Letter. In the case of issuance in a different name, the
employer identification or social security number of the person named must also
be indicated. Securityholders tendering Old Notes by book-entry transfer may
request that Old Notes not exchanged be credited to such account maintained at
the Book-Entry Transfer Facility as such securityholder may designate hereon. If
no such instructions are given, such Old Notes not exchanged will be returned to
the name or address of the person signing this Letter.

5. TRANSFER TAXES.

Qwest will pay all transfer taxes, if any, applicable to the
transfer of Old Notes to it or its order pursuant to the Exchange Offer. If,
however, Exchange Notes and/or substitute Old Notes not exchanged are to be
delivered to, or are to be registered or issued in the name of, any person other
than the registered holder of the Old Notes tendered hereby, or if tendered Old
Notes are registered in the name of any person other than the person signing
this Letter, or if a transfer tax is imposed for any reason other than the
transfer of Old Notes to Qwest or its order pursuant to the Exchange Offer, the
amount of any such transfer taxes (whether imposed on the registered holder or
any other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted
herewith, the amount of such transfer taxes will be billed directly to such
tendering holder.

EXCEPT AS PROVIDED IN THIS INSTRUCTION 5, IT WILL NOT BE
NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD NOTES SPECIFIED IN
THIS LETTER.

6. WAIVER OF CONDITIONS.

Qwest reserves the absolute right to waive satisfaction of any
or all conditions enumerated in the Prospectus.

7. NO CONDITIONAL TENDERS.

No alternative, conditional, irregular or contingent tenders
will be accepted. All tendering holders of Old Notes, by execution of this
Letter, shall waive any right to receive notice of the acceptance of their Old
Notes for exchange.

Neither Qwest, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
<PAGE>

tender of Old Notes nor shall any of them incur any liability for failure to
give any such notice.

8. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.

Any holder whose Old Notes has been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.

9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.

Questions relating to the procedure for tendering, as well as
requests for additional copies of the Prospectus and this Letter, may be
directed to the Exchange Agent, at the address and telephone number indicated
above.

TO BE COMPLETED BY ALL TENDERING HOLDERS

PAYER'S NAME: QWEST COMMUNICATIONS INTERNATIONAL INC.

PART I--TAXPAYER
IDENTIFICATION NUMBER
SUBSTITUTE

ENTER YOUR TAXPAYER
IDENTIFICATION NUMBER IN
THE
FORM W-9
SOCIAL SECURITY NUMBER
APPROPRIATE BOX. FOR MOST
INDIVIDUALS, THIS IS YOUR
DEPARTMENT OF THE TREASURY
SOCIAL SECURITY NUMBER. IF
YOU DO NOT HAVE A NUMBER, OR
INTERNAL REVENUE SERVICE
SEE HOW TO OBTAIN A "TIN" IN
THE ENCLOSED GUIDELINES.

NOTE: IF THE ACCOUNT IS IN
MORE THAN ONE NAME, SEE EMPLOYER IDENTIFICATION NUMBER
THE CHART ON PAGE 2 OF THE
ENCLOSED GUIDELINES TO
DETERMINE WHAT NUMBER TO
GIVE.
PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (SEE
ENCLOSED GUIDELINES)

PAYER'S REQUEST FOR TAXPAYER
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT:
IDENTIFICATION NUMBER (TIN)

(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER
(OR I AM WAITING AND CERTIFICATION FOR A NUMBER TO BE ISSUED TO ME), AND

(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN
NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE "IRS") THAT I AM SUBJECT TO
<PAGE>

BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS
OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.

SIGNATURE DATE CERTIFICATION
GUIDELINES--YOU MUST CROSS OUT ITEM (2) OF THE ABOVE CERTIFICATION IF YOU HAVE
BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING OF INTEREST OR DIVIDENDS ON YOUR TAX RETURN. HOWEVER, IF AFTER
BEING NOTIFIED BY THE IRS THAT YOU WERE SUBJECT TO BACKUP WITHHOLDING YOU
RECEIVED ANOTHER NOTIFICATION FROM THE IRS THAT YOU ARE NO LONGER SUBJECT TO
BACKUP WITHHOLDING, DO NOT CROSS OUT ITEM (2). CERTIFICATION OF PAYEE
AWAITING TAXPAYER IDENTIFICATION NUMBER

I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION NUMBER
HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN APPLICATION TO
RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE
SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE (OR I INTEND TO MAIL
OR DELIVER AN APPLICATION IN THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT
PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE PAYER, 31 PERCENT OF ALL
PAYMENTS MADE TO ME ON ACCOUNT OF THE EXCHANGE NOTES SHALL BE RETAINED UNTIL I
PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE PAYER AND THAT, IF I DO NOT
PROVIDE MY TAXPAYER IDENTIFICATION NUMBER WITHIN SIXTY (60) DAYS, SUCH
RETAINED AMOUNTS SHALL BE REMITTED TO THE INTERNAL REVENUE SERVICE AS BACKUP
WITHHOLDING AND 31 PERCENT OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER
WILL BE WITHHELD AND REMITTED TO THE INTERNAL REVENUE SERVICE UNTIL I PROVIDE
A TAXPAYER IDENTIFICATION NUMBER.

SIGNATURE DATE

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE NOTES.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

<PAGE>

EXHIBIT 99.2

NOTICE OF GUARANTEED
DELIVERY FOR TENDER OF ALL OUTSTANDING 10 7/8% SENIOR
NOTES DUE 2007 IN EXCHANGE FOR NEW 10 7/8% SERIES B
SENIOR NOTES DUE 2007 REGISTERED UNDER THE
SECURITIES ACT OF 1933 OF QWEST COMMUNICATIONS INTERNATIONAL INC.

NOTICE OF GUARANTEED DELIVERY

FOR

TENDER OF ALL OUTSTANDING
10 7/8% SENIOR NOTES DUE 2007
IN EXCHANGE FOR NEW
10 7/8% SERIES B SENIOR NOTES DUE 2007
REGISTERED UNDER THE SECURITIES ACT OF 1933
OF

QWEST COMMUNICATIONS INTERNATIONAL INC.

Registered holders of outstanding 10 7/8% Senior Notes due 2007
(the "Old Notes") who wish to tender their Old Notes in exchange for
a like principal amount of new 10 7/8% Series B Senior Notes due 2007 (the
"Exchange Notes") and whose Old Notes are not immediately available or who
cannot deliver their Old Notes and Letter of Transmittal (and any other
documents required by the Letter of Transmittal) to Bankers Trust Company of
New York (the "Exchange Agent") prior to the Expiration Date, may use this
Notice of Guaranteed Delivery or one substantially equivalent hereto. This
Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile
transmission (receipt confirmed by telephone and an original delivered by
guaranteed overnight courier) or letter to the Exchange Agent. See "The
Exchange Offer--Procedures for Tendering Old Notes" in the Prospectus.

The Exchange Agent for the Exchange Offer is:

BANKERS TRUST COMPANY OF NEW YORK

BY MAIL: BY HAND:

BY OVERNIGHT MAIL OR COURIER:

BT Services Tennessee, Inc.
Corporate Trust and Agency Group
Reorganization Unit
648 Grassmere Park Road
Nashville, TN 37211

For Information, call:
(800) 735-7777
Confirm: (615) 835-3572
Fax: (615) 835-3701

Delivery of this Notice of Guaranteed Delivery to an address other than as set
forth above or transmission of instructions via a facsimile transmission to a
number other than as set forth above will not constitute a valid delivery.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures.
If a signature on a Letter of Transmittal is required to be guaranteed by an
Eligible Institution (as defined in the Prospectus), such signature guarantee
<PAGE>

must appear in the applicable space provided on the Letter of Transmittal for
Guarantee of Signatures.

Ladies and Gentleman:

The undersigned hereby tenders the principal amount of Old Notes
indicated below, upon the terms and subject to the conditions contained in the
Prospectus dated June __, 1997 of Qwest Communications International Inc. (the
"Prospectus"), receipt of which is hereby acknowledged.

DESCRIPTION OF SECURITIES TENDERED

NAME AND ADDRESS OF
REGISTERED HOLDER AS IT
APPEARS ON THE 10 7/8%
SENIOR NOTES DUE CERTIFICATE NUMBER(S)
2007 ("OLD NOTES") OF EXISTING
(PLEASE PRINT) NOTES TENDERED

AGGREGATE PRINCIPAL PRINCIPAL AMOUNT
AMOUNT REPRESENTED BY OF OLD NOTES
OLD NOTES TENDERED

THE FOLLOWING GUARANTEE MUST BE COMPLETED

GUARANTEE OF DELIVERY

(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a firm that is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office, branch, agency or
correspondent in the United States, hereby guarantees to deliver to the
Exchange Agent at one of its addresses set forth above, the certificates
representing the Old Notes, together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, and any other documents required by the Letter of
Transmittal within three New York Stock Exchange, Inc. trading days after the
date of execution of this Notice of Guaranteed Delivery.

NAME OF FIRM:
--------------------------------------------------
(AUTHORIZED SIGNATURE)

ADDRESS:
------------------------------------------------------
(ZIP CODE)
NAME:
----------------------------------------------------------

TITLE:
---------------------------------------------------------
(PLEASE TYPE OR PRINT)

AREA CODE AND TELEPHONE NUMBER: DATE:
----------------------- -------------------

NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. OLD NOTES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

<PAGE>

EXHIBIT 99.3

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.

GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--

GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--

1. An individual's account The individual

2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)

3. Husband and wife The actual owners of the
(joint account) account or, if joint
funds, either person(1)

4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)

5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)

6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent person(3)
minor, or incompetent person

7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)

b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under state
law

8. Sole proprietorship account The owner(4)
<PAGE>

9. A valid trust, estate, or pension The legal entity (Do not
trust furnish the identifying
number of the personal
representative or
trustee unless the legal
entity itself is not
designated in the
account title.)(5)

10. Corporate account The corporation

11. Religious, charitable, or The organization
educational organization account

12. Partnership account held in the The partnership
name of the business

13. Association, club, or other The organization
tax-exempt organization

14. A broker or registered nominee The broker or nominee

15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments

(1) List first and circle the name of the person whose number you furnish.

(2) Circle the minor's name and furnish the minor's social security number.

(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.

(4) Show your individual name. You may also enter your business name. You
may use either your Social Security number or your Employer Identification
number.

(5) List first and circle the name of the legal trust, estate or pension
trust.

NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

OBTAINING A NUMBER

If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5. Application for a Social Security Number Card (for
<PAGE>

individuals), or Form SS-4, Application for Employer Identification Number
(for businesses and all other entitles), at the local office of the Social
Security Administration or the Internal Revenue Service (the "IRS") and apply
for a number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

Payees specifically exempted from backup withholding on ALL payments include
the following:

- - A corporation.

- - A financial institution.

- - An organization exempt from tax under Section 501(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), or an individual retirement plan or a
custodial account under Section 403(b)(7) of the Code.

- - The United States or any agency or instrumentality thereof.

- - A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.

- - A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.

- - An international organization or any agency or instrumentality thereof.

- - A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.

- - A real estate investment trust.

- - A common trust fund operated by a bank under Section 584(a) of the Code.

- - An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1) of the Code.

- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.

- - A foreign central bank of issue.

Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:

- - Payments to nonresident aliens subject to withholding under Section 1441 of
the Code.

- - Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.

- - Payments of patronage dividends where the amount received is not paid in
money.

- - Payments made by certain foreign organizations.

Payments of interest not generally subject to backup withholding include the
following:
<PAGE>

- - Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.

- - Payments of tax-exempt interest (including exempt-interest dividends under
Section 852 of the Code).

- - Payments described in Section 6049(b)(5) of the Code to non-resident aliens.

- - Payments on tax-free covenant bonds under Section 1451 of the Code.

- - Payments made by certain foreign organizations.

Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE
THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH THE PAYER A
COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).

Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6042, 6044, 6045,
6049, and 6050A and 6050N of the Code and the regulations promulgated
thereunder.

PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividends, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.

(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.

(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE

<PAGE>

EXHIBIT 99.4
QWEST COMMUNICATIONS INTERNATIONAL INC.

Offer to Exchange $1,000 in principal amount of
10 7/8% Series B Senior Notes due 2007
which have been registered under the Securities Act
for
each $1,000 in principal amount of
outstanding 10 7/8% Senior Notes due 2007
that were issued and sold in a transaction
exempt from registration under the
Securities Act of 1933,
as amended

To Securities Dealers, Commercial Banks,
Trust Companies and Other Nominees:

Enclosed for your consideration is a Prospectus dated ________, 1997 (as
the same may be amended or supplemented from time to time, the "Prospectus")
and a form of Letter of Transmittal (the "Letter of Transmittal") relating to
the offer (the "Exchange Offer") by Qwest Communications International Inc.
(the "Issuer") to exchange up to $250,000,000 in aggregate principal amount of
its 10 7/8% Series B Senior Notes due 2007 (the "Exchange Notes") for up to
$250,000,000 in aggregate principal amount of its outstanding 10 7/8% Senior
Notes due 2007 that were issued and sold in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Old Notes").

We are asking you to contact your clients for whom you hold Old Notes
registered in your name or in the name of your nominee, in addition, we ask
you to contact your clients who, to your knowledge, hold Old Notes registered
in their old name. The Issuer will not pay any fees or commissions to any
broker, dealer or other person in connection with the solicitation of tenders
pursuant to the Exchange Offer. You will, however, be reimbursed by the
Issuer for customary mailing and handling expenses incurred by you to
forwarding any of the enclosed materials to your clients. The Issuer will pay
all transfer taxes, if any, applicable to the tender of Old Notes to it or its
order, except as otherwise provided in the Prospectus and the Letter of
Transmittal.

Enclosed are copies of the following documents:

1. the Prospectus;

2. a Letter of Transmittal for your use in connection with the exchange
of Old Notes and for the information of your clients (facsimile copies of the
Letter of Transmittal may be used to exchange Old Notes);

3. a form of letter that may be sent to your clients for whose accounts
you hold Old Notes registered in your name or the name of your nominee, with
space provided for obtaining the clients' instructions with regard to the
Exchange Offer;
<PAGE>

4. a Notice of Guaranteed Delivery;

5. guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and

6. a return envelope addressed to Bankers Trust Company, the Exchange
Agent.

YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON _________, 1997, UNLESS EXTENDED (THE "EXPIRATION
DATE"). OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN,
SUBJECT TO THE PROCEDURES DESCRIBED IN THE PROSPECTUS, AT ANY TIME PRIOR TO
THE EXPIRATION DATE.

To tender Old Notes, certificates for Old Notes or a Book-Entry
Confirmation (as defined in the Prospectus), a duly executed and properly
completed Letter of Transmittal or a facsimile thereof, and any other required
documents, must be received by the Exchange Agent as provided in the
Prospectus and the Letter of Transmittal.

Questions and requests for assistance with respect to the Exchange Offer
or for additional copies of the enclosed material may be directed to the
Exchange Agent at its address set forth in the Prospectus or at (800) 735-
7777.

Very truly yours,

QWEST COMMUNICATIONS INTERNATIONAL INC.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY PERSON AS AN AGENT OF THE ISSUER OR THE EXCHANGE AGENT, OR ANY
AFFILIATE THEREOF, OR AUTHORIZED YOU OR ANY OTHER PERSON TO MAKE ANY
STATEMENTS OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM WITH RESPECT TO THE
EXCHANGE OFFER, EXCEPT FOR THE ENCLOSED DOCUMENTS AND THE STATEMENTS EXPRESSLY
MADE IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.

<PAGE>

EXHIBIT 99.5

QWEST COMMUNICATIONS INTERNATIONAL INC.
OFFER TO EXCHANGE

10-7/8% SERIES B SENIOR NOTES DUE 2007
FOR ANY AND ALL OF ITS OUTSTANDING
10-7/8% SENIOR NOTES DUE 2007

TO OUR CLIENTS:

Enclosed for your consideration is a Prospectus, dated ________ __,
1997 (the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Qwest
Communications International Inc. ("Qwest") to exchange $1,000 principal amount
of its 10-7/8% Series B Senior Notes due 2007 (the "Exchange Notes"), which
exchange has been registered under the Securities Act of 1933, as amended,
pursuant to a registration statement of which the Prospectus is part, for each
$1,000 principal amount of its outstanding 10-7/8% Senior Notes due 2007 (the
"Old Notes") of which $250.0 million in aggregate principal amount are
outstanding as of the date hereof, upon the terms and subject to the conditions
described in the Prospectus and the Letter of Transmittal. The Exchange Offer
is being made in order to satisfy certain obligations of Qwest contained in the
Registration Agreement dated as of March 31, 1997 between Qwest and Salomon
Brothers Inc, Donaldson, Lufkin & Jenrette Securities Corporation and Goldman,
Sachs & Co.

This material is being forwarded to you as the beneficial owner of the
Old Notes carried by us in your account but not registered in your name. A
tender of such Old Notes may only be made by us as the holder of record and
pursuant to your instructions.

Accordingly, we request instructions as to whether you wish us to
tender on your behalf the Old Notes held by us for your account, pursuant to
the terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.

Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Old Notes on your behalf in accordance with
the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00
p.m., New York City time, on _______________________, 1997, unless extended by
Qwest. Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn
at any time before the Expiration Date.

Your attention is directed to the following:

1. The Exchange Offer is for any and all Old Notes.

2. The Exchange Offer is subject to certain conditions set forth
in the Prospectus in the section captioned "The Exchange Offer--Certain
Conditions to the Exchange Offer."

3. Any transfer taxes incident to the transfer of Old Notes from
the holder to Qwest will be paid by Qwest, except as otherwise provided in the
Instructions in the Letter of Transmittal.

4. The Exchange Offer expires at 5:00 p.m., New York City time,
on ______________, 1997, unless extended by Qwest, provided it may not be
extended beyond ___, 1997.

If you wish to have us tender your Old Notes, please so instruct us by
completing, executing and returning to us the instruction form on the back of
this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION
ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OLD NOTES.
<PAGE>

INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER

The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Qwest
Communications International Inc. with respect to its Old Notes.

This will instruct you to tender the Old Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.

Please tender the Old Notes held by you for my account as indicated
below:
<PAGE>

<TABLE>
<S> <C>
Aggregate Principal Amount
of Old Notes

10 7/8% SENIOR NOTES DUE 2007 . . . . . . . . . . --------------------------------------------------
[ ] Please do not tender any Old Notes
held by you for my account.

Dated: , 1997 --------------------------------------------------
-----------------------------
--------------------------------------------------
Signature(s)

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

--------------------------------------------------
Please print name(s) here

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

--------------------------------------------------
Address(es)

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

--------------------------------------------------
Area Code and Telephone Number

--------------------------------------------------
Tax Identification or Social Security No(s).
</TABLE>

None of the Old Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Old Notes held by us for
your account.