ITC DELTACOM INC
424B2, 1999-04-13
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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<PAGE>

                                                 Filed Pursuant to Rule 424(b)2
                                                 Registration No. 333-75635
 
PROSPECTUS
 
                                  $300,000,000
 
 
               Common Stock, Preferred Stock, Depositary Shares,
      Warrants, Subscription Rights, Stock Purchase Contracts to Purchase
            Common Stock or Preferred Stock and Stock Purchase Units
 
 
By this prospectus, we may offer, from time to time, in one or more series or
classes the following securities:
 
 .  shares of our common stock,             .  warrants exercisable for our
                                              common stock, preferred stock or
                                              depositary shares,
 .  shares of our preferred stock,
 
                                           .  subscription rights evidencing
 .  shares of our preferred stock              the right to purchase any of the
   represented by depositary                  above securities, and
   shares,                                    
 
                                           .  stock purchase contracts to
                                              purchase common stock or
                                              preferred stock and stock
                                              purchase units.
 
The aggregate initial offering price of these "offered securities" that we may
issue will not exceed $300,000,000.
 
  We may offer the offered securities in amounts, at prices and on terms
determined at the time of the offering. We will provide you with specific terms
of the applicable offered securities in supplements to this prospectus.
 
  Our common stock is listed for trading on The Nasdaq Stock Market's National
Market under the symbol "ITCD." On April 9, 1999, the last reported sale price
of our common stock on the Nasdaq National Market was $24.9375.
 
  You should read this prospectus and any supplement carefully before you
decide to invest. This prospectus may not be used to consummate sales of the
offered securities unless it is accompanied by a prospectus supplement
describing the method and terms of the offering of those offered securities.
 
  Investing in the offered securities involves risks. See "Risk Factors"
beginning on page 1 of this prospectus.
 
                               ----------------
 
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these offered securities or
determined if this prospectus is truthful or complete. It is illegal for any
person to tell you otherwise.
 
                               ----------------
 
                 The date of this prospectus is April 13, 1999.
<PAGE>
 
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
Prospectus                                                                Page
- ----------                                                                ----
<S>                                                                       <C>
Risk Factors.............................................................   1
Cautionary Note Regarding Forward-Looking Statements.....................  15
About This Prospectus....................................................  16
Where You Can Find More Information......................................  16
About ITC/\DeltaCom.......................................................  18
Use of Proceeds..........................................................  19
ERISA Matters............................................................  19
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
 Dividends...............................................................  20
Description of Common Stock..............................................  21
Description of Preferred Stock...........................................  23
Description of Depositary Shares.........................................  27
Description of Warrants..................................................  31
Description of Stock Purchase Contracts to Purchase Common Stock or
 Preferred Stock and Stock Purchase Units................................  32
Description of Subscription Rights.......................................  33
Plan of Distribution.....................................................  34
Legal Matters............................................................  36
Experts..................................................................  36
</TABLE>
 
                           -------------------------
 
   If it is against the law in any state to make an offer to sell the
securities, or to solicit an offer from someone to buy the securities, then
this prospectus does not apply to any person in that state, and no offer or
solicitation is made by this prospectus to any such person.
 
   You should rely only on the information contained or incorporated by
reference in this prospectus or any supplement. We have not authorized anyone
to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. You should
assume that the information appearing in this prospectus or any supplement is
accurate only as of any date on the front cover of these documents.
<PAGE>
 
 
                                  RISK FACTORS
 
   We provide integrated voice and data telecommunications services on a retail
basis to mid-sized and major regional businesses in the southern United States.
We call this business segment our Retail Services. We are also a leading
regional provider of wholesale long-haul services to other telecommunications
companies. We call this business segment our Carriers' Carrier Services. In
connection with these businesses, we own, operate and manage an extensive fiber
optic network in the southern United States. A more detailed description of our
business may be found in our Annual Report on Form 10-K for the year ended
December 31, 1998 filed with the Securities and Exchange Commission on March
25, 1999. See "Where You Can Find More Information" to obtain a copy of this
Annual Report.
 
   In addition to the other information contained and incorporated by reference
in this prospectus, you should carefully consider the following risk factors
relating to ITC/\DeltaCom and our common stock before  purchasing the offered
securities.
 
WE EXPECT TO CONTINUE TO HAVE OPERATING LOSSES AND NEGATIVE CASH FLOW AFTER
CAPITAL EXPENDITURES WHICH MAY RESULT IN OUR FAILURE TO MEET OUR WORKING
CAPITAL AND DEBT SERVICE REQUIREMENTS
 
   As we have implemented our business strategy to expand our
telecommunications service offerings, expand our fiber optic network and enter
new markets, we have experienced operating losses and negative cash flow after
capital expenditures. We expect this will continue during the next several
years as we continue to expand our business and make substantial capital
expenditures. If we cannot achieve or sustain operating profitability and
positive net cash flow, we may not be able to obtain the funds necessary to
continue our operations or to repay amounts due on our outstanding
indebtedness. We cannot assure you that we will achieve or sustain
profitability or positive net cash flow in the future. See "--We may not have,
or be able to obtain, the significant amounts of capital that we need to expand
our network, operations and services as planned."
 
WE MAY NOT HAVE, OR BE ABLE TO OBTAIN, THE SIGNIFICANT AMOUNTS OF CAPITAL THAT
WE NEED TO EXPAND OUR NETWORK, OPERATIONS AND SERVICES AS PLANNED
 
   We need significant capital to expand our network, operations and services
in accordance with our business plans. We have continued to accelerate
expansion of our fiber optic network and our Retail Services segment for which
we have made significant capital expenditures. During 1998, we made capital
expenditures of approximately $148 million on a consolidated basis. We
currently estimate that our capital expenditures will total approximately $125
million in 1999. In addition, we expect to make substantial capital
expenditures after 1999 and are in the process of evaluating those
requirements. If our estimates are inaccurate and/or we do not have access to
the capital that we require, we will need to change our business plans. This
could have a material adverse effect on our business, financial condition and
results of operations.
 
 
   Our planned capital expenditures primarily will be for:
 
  .  continued development and construction of our fiber optic network,
     including transmission equipment;
 
  .  continued addition of facilities-based local telephone service to our
     bundle of integrated telecommunications services, including acquisition
     and installation of switches and related equipment;
 
  .  the addition of switching capacity, electrical equipment and additional
     collocation space in connection with the expansion of our provision of
     local telecommunications services to Internet service providers, or
     ISPs;
 
  .  market expansion; and
 
  .  infrastructure enhancements, principally for information systems.
 
   We expect to have sufficient funds to enable us to expand our business as
currently planned through the second quarter of 2001. We believe that these
funds will be provided by:
 
  .  cash on hand, which amounted to approximately $184.2 million at December
     31, 1998;
 
  .  cash flow from operations; and
 
                                       1
<PAGE>
 
 
  .  borrowings available under our $50.0 million revolving credit facility.
 
However, we cannot assure you that our capital resources will permit us to fund
the planned expansion of our network, operations and services.
 
   If our current sources of funds are unavailable to fund our business plans,
we may need to seek additional funds. These additional funds may come from
public and private equity and debt financings, but we cannot assure you that we
will be able to obtain any additional funds on a timely basis, on terms that
are acceptable to us or at all. Our inability to obtain the capital that we
need to implement our current business plans could have a material adverse
effect on our business, financial condition and results of operations.
 
   After the second quarter of 2001, or sooner if our estimates are not
accurate for any reason, we may need to seek additional financing:
 
  .  to fund capital expenditures;
 
  .  for working capital;
 
  .  to fund new business activities related to our current and planned
     businesses; and
 
  .  to acquire, or enter into joint ventures and strategic alliances with,
     other businesses.
 
   These additional funds may come from public and private equity and debt
financings, or from borrowing from one or more lenders. We cannot assure you
that we will be able to obtain any additional funds on a timely basis, on terms
that are acceptable to us, or at all. If we cannot generate or obtain these
additional funds, we may have to delay or abandon some or all of our future
plans or expenditures. This could have a material adverse effect on our
business, financial condition and results of operations.
 
   Our estimate of future capital requirements is a "forward-looking statement"
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The actual amount and timing of our future
capital requirements may differ substantially from our estimate due to factors
such as:
 
  .  regulatory, technological, or competitive developments;
 
  .  unforeseen delays;
 
  .  cost overruns;
 
  .  changes in demand for our services; and
 
  .  new market developments and opportunities.
 
WE HAVE SIGNIFICANT DEBT AND WE MAY BE UNABLE TO SERVICE THAT DEBT
 
   We have significant debt. Set forth below are some of our recent historical
results on a consolidated basis.
 
<TABLE>
<CAPTION>
                                        Year ended                    Year ended
     At December 31, 1998            December 31, 1997             December 31, 1998
     --------------------            -----------------       ----------------------------
 <C>                           <C>                           <S>
 Indebtedness of $417.9        Earnings insufficient to      Earnings insufficient to
  million                      cover fixed charges by $13.7  cover fixed charges by $32.4
                               million                       million
 
 Stockholders' equity of       EBITDA, as adjusted, less     EBITDA, as adjusted, less
  $118.2 million               capital expenditures and      capital expenditures and
                               interest expense of negative  interest expense of negative
                               $43.5 million                 $156.7 million
</TABLE>
 
                                       2
<PAGE>
 
 
   EBITDA, as adjusted, consists of operating loss before depreciation,
amortization and other nonrecurring operating expenses. We have included
EBITDA, as adjusted, data because it is a measure commonly used in the
industry. EBITDA, as adjusted, is not a measure of financial performance under
generally accepted accounting principles and should not be considered an
alternative to net income as a measure of performance or to cash flows as a
measure of liquidity.
 
   We cannot assure you that we will be able to improve our earnings before
fixed charges or that we will be able to meet our debt service obligations. We
will be in default under the terms of our debt obligations if:
 
  .  we are unable to generate sufficient cash flow or otherwise obtain funds
     necessary to make required payments or
 
  .  we otherwise fail to comply with the various covenants in our debt
     obligations. A default would permit the holders of the indebtedness to
     accelerate its maturity.
 
   This, in turn, could cause defaults under our other indebtedness and would
have a material adverse effect on our business, financial condition and results
of operations.
 
   Even if we are able to meet our debt service obligations, the amount of debt
we have could adversely affect us in a number of ways, including by:
 
  .  limiting our ability to obtain any necessary financing in the future for
     working capital, capital expenditures, debt service requirements or
     other purposes;
 
  .  limiting our flexibility in planning for, or reacting to, changes in our
     business;
 
  .  placing us at a competitive disadvantage relative to our competitors who
     have lower levels of debt;
 
  .  making us more vulnerable to a downturn in our business or the economy
     generally; and
 
  .  requiring us to use a substantial portion of our cash flow from
     operations to pay principal and interest on our debt, instead of
     contributing those funds to other purposes, such as working capital and
     capital expenditures.
 
   To be able to meet our debt service requirements we must successfully
implement our business strategy. Therefore, we will need to:
 
  .  expand our network;
 
  .  obtain and retain a significant number of customers; and
 
  .  experience significant and sustained growth in our cash flow.
 
   We cannot assure you that we will successfully implement our business
strategy or that we will be able to generate sufficient cash flow from
operating activities to meet our debt service obligations and working capital
requirements. Our ability to meet our obligations will be dependent upon our
future performance, which will be subject to prevailing economic conditions and
to financial, business and other factors.
 
   If the implementation of our business strategy is delayed or unsuccessful,
or if we do not generate sufficient cash flow to meet our debt service and
working capital requirements, we may need to seek additional financing. If we
are unable to obtain such financing on terms that are acceptable to us, we
could be forced to dispose of assets to make up for any shortfall in the
payments due on our indebtedness under circumstances that might not be
favorable to realizing the highest price for those assets. A substantial
portion of our assets consist of intangible assets, the value of which will
depend upon a variety of factors, including without limitation, the success of
our business. As a result, we cannot assure you that our assets could be sold
quickly enough, or for amounts sufficient, to meet our obligations.
 
 
                                       3
<PAGE>
 
 
OUR CURRENT INDEBTEDNESS CONTAINS RESTRICTIVE COVENANTS
 
   We are subject to restrictions under:
 
  .  the indenture pursuant to which our $125 million principal amount of 9 3/4%
     Senior Notes due November 15, 2008 were issued (the "November 1998 Note
     Indenture");
 
  .  the indenture pursuant to which our $160 million principal amount of 8 7/8%
     Senior Notes due March 1, 2008 were issued (the "March 1998 Note
     Indenture");
 
  .  the indenture pursuant to which our $200 million principal amount of 11%
     Senior Notes due June 1, 2007 were issued (the "1997 Note Indenture"); and
 
  .  our $50.0 million revolving credit facility.
 
   These restrictions affect and, in certain cases, significantly limit or
prohibit, among other things, our ability and the ability of our subsidiaries
to:
 
  .  incur additional indebtedness;
 
  .  create liens;
 
  .  make investments;
 
  .  issue stock; and
 
  .  sell assets.
 
   The November 1998 Note Indenture, the March 1998 Note Indenture and the 1997
Note Indenture (collectively, the "Indentures") restrict our ability to incur
indebtedness, other than indebtedness to finance the acquisition of equipment,
inventory or network assets, by requiring compliance with specified leverage
ratios. In addition, if and when we borrow funds under our credit facility, our
credit facility will require us to maintain certain financial ratios. We cannot
assure you that we will be able to maintain the required ratios following such
borrowing. In addition, these restrictive covenants may adversely affect our
ability to finance our future operations or capital needs, or to engage in
other business activities that may be in our interest. See "--We have
significant debt and we may be unable to service that debt."
 
WE MAY NOT BE ABLE TO MANAGE OUR GROWTH SUCCESSFULLY
 
   The expansion and development of our business will depend upon, among other
things, our ability to:
 
  .  successfully implement our sales and marketing strategy;
 
  .  evaluate markets;
 
  .  design fiber routes;
 
  .  secure financing;
 
  .  install facilities;
 
  .  acquire rights of way;
 
  .  obtain any required government authorizations;
 
  .  interconnect to, and collocate with, facilities owned by incumbent local
     exchange carriers; and
 
  .  obtain appropriately priced unbundled network elements and wholesale
     services from the incumbent local exchange carriers.
 
   These all must be accomplished in a timely manner, at reasonable cost and on
satisfactory terms and conditions. Our rapid growth, particularly in the
provision of Retail Services, has placed, and the growth we anticipate in our
other services may in the future also place, a significant strain on our
administrative, operational and financial resources. Our ability to continue to
manage our growth successfully will require us to:
 
  .  enhance our operational, management, financial and information systems
     and controls; and
 
  .  hire and retain qualified sales, marketing, administrative, operating
     and technical personnel.
 
 
                                       4
<PAGE>
 
 
   We cannot assure you that we will be able to do so. In addition, as we
increase our service offerings and expand our targeted markets, there will be
additional demands on customer support, sales and marketing, administrative
resources and network infrastructure. These demands will be intensified if we
continue to accelerate our expansion plans. Our inability to manage our growth
effectively could have a material adverse effect on our business, results of
operations and financial condition.
 
DEVELOPMENT AND EXPANSION OF OUR BUSINESS, INCLUDING THROUGH ACQUISITIONS, IS
SUBJECT TO REGULATORY AND MARKET RISKS
 
   The successful implementation of our business strategy to provide an
integrated bundle of telecommunications services and expand our operations will
be subject to a variety of risks, including:
 
  .  competition and pricing;
 
  .  the availability of capital on favorable terms;
 
  .  regulatory uncertainties;
 
  .  operating and technical problems;
 
  .  the need to establish and maintain interconnection and collocation
     arrangements with incumbent local exchange carriers in our target
     markets; and
 
  .  the potential difficulties of offering local exchange services.
 
   In addition, the expansion of our business may involve acquisitions of other
telecommunications businesses and assets that, if made, could divert our
resources and management time and could require integration with our existing
operations. We cannot assure you that any acquisitions could be successfully
integrated into our operations or that any acquired business will perform as
expected. Our failure to implement our expansion and growth strategy
successfully would have a material adverse effect on our business, results of
operations and financial condition.
 
OUR BUSINESS IS SUBJECT TO SIGNIFICANT COMPETITIVE PRESSURES
 
   Our industry is highly competitive and the level of competition,
particularly with respect to pricing, is increasing. For example, prices for
long distance services and for data transmission services have declined
substantially in recent years. These prices are expected to continue to
decline, which will adversely affect our gross margins as a percentage of
revenues. In addition, many of our existing and potential competitors have
financial, technical and other resources and customer bases and name
recognition far greater than our own. We cannot assure you that we will be able
to achieve or maintain adequate market share or revenues, or compete
effectively in any of our markets.
 
  .  We face intense competition from incumbent local exchange carriers,
     especially BellSouth
 
   Local telephone and intraLATA long distance services substantially similar
   to those that we offer are also offered by the incumbent local exchange
   carriers serving the markets that we serve or plan to serve. BellSouth is
   the incumbent local exchange carrier and a particularly strong competitor in
   most of these markets. BellSouth and other incumbent local exchange carriers
   already have relationships with every customer. These carriers may be able
   to subsidize services of the type we offer from service revenues not subject
   to effective competition, which could result in even more intense price
   competition.
 
  .  Other competitors and technologies in our industries may further
     increase competition
 
   Providers of long distance services and Carriers' Carrier Services. We
   compete with long distance carriers in the provision of interLATA long
   distance services and Carriers' Carrier Services. The interLATA long
   distance market consists of three major competitors, AT&T, MCI WorldCom and
   Sprint. Other companies operate or are building networks in the southern
   United States and other geographic areas. Our other competitors in the long
   distance services and Carriers' Carrier Services markets are likely to
   include Regional Bell Operating Companies, or RBOCs, providing out-of-region
   and, with the future removal of regulatory barriers, in-region long distance
   services, other competitive local exchange carriers, microwave and satellite
   carriers, and private networks owned by large end-users. We also compete
   with
 
                                       5
<PAGE>
 
 
   direct marketers, equipment vendors and installers, and telecommunications
   management companies with respect to certain portions of our business.
 
   Wireless providers. In the future, providers of wireless services may offer
   products that increasingly become a substitute for, rather than only a
   supplement to, a customer's wireline communications services. Competition
   with providers of wireless telecommunications services may be intense. Many
   of our potential wireless competitors have substantially greater financial,
   technical, marketing, sales, manufacturing and distribution resources than
   our own. In recent years, the FCC has made additional spectrum available
   through public auction for use in wireless communications, including
   broadband local loops.
 
   New transmission technologies. We also may increasingly face competition
   from companies offering long distance data and voice services over the
   Internet. Such companies could enjoy a significant cost advantage because
   at present they do not pay carrier access charges or universal service
   fees. Other competitors are also deploying new transmission technologies in
   their networks to upgrade capacity and reduce costs. For example, in June
   1998, Sprint announced its intention to offer voice, data and video
   services over its nationwide Asynchronous Transmission Mode, or ATM,
   network, which Sprint anticipates will significantly reduce its cost to
   provide such services. Sprint plans to bill its customers based upon the
   amount of traffic carried, without regard to the time required to send the
   traffic or the traffic's destination. Other advanced networks are being
   deployed by other carriers.
 
   Competitive local exchange carriers. We will face competition in the
   markets in which we operate from one or more competitive local exchange
   carriers operating fiber optic networks, in some cases in conjunction with
   the local cable television operator. AT&T, MCI WorldCom, Sprint and others
   have begun to offer local telecommunications services, either directly or
   in conjunction with other competitive local exchange carriers in certain
   locations, and are expected to expand that activity as opportunities
   created by the Telecommunications Act develop. BellSouth has announced
   plans to provide local service in areas of its region where it is not the
   incumbent local exchange carrier, and to establish its own less regulated
   "competitive local exchange carrier" subsidiaries.
 
  .  Business combinations and strategic alliances may increase competition
 
     A continuing trend toward business combinations and strategic alliances
  in the telecommunications industry may further increase competition. For
  example, the national long distance carrier WorldCom has merged with MCI.
  MCI WorldCom also acquired competitive local exchange carriers, including
  MFS Communications Company, Inc. and Brooks Fiber Properties, Inc. AT&T has
  acquired another competitive local exchange carrier, Teleport
  Communications Group Inc., as well as Tele-Communications, Inc., a major
  cable television operator, and has announced plans to provide services in
  conjunction with Time Warner Inc. AT&T has also announced plans to enter
  into a joint venture with British Telecommunications plc to combine the
  international assets and operations of each company, including their
  existing international networks. On May 11, 1998, SBC Communications, a
  holding company that owns Southwestern Bell and Pacific Bell, and Ameritech
  announced their intent to merger which, if approved, would mean that the
  seven original RBOCs have been reduced to four. Other proposed or completed
  acquisitions include:
 
    .  Qwest's acquisition of LCI International, Inc. in June 1998 which
       created the nation's fourth-largest long distance carrier
 
    .  Bell Atlantic's proposed acquisiton of GTE announced in July 1998
 
    .  SBC's proposed strategic alliance with Williams Communcations
 
     These types of strategic alliances and business combinations could put
  us at a significant competitive disadvantage.
 
   .  Recent legislation and regulation may also increase competition
 
  Long distance services. The Telecommunications Act of 1996 creates the
  foundation for increased competition in the long distance market from the
  incumbent local exchange carriers. Such competition
 
                                       6
<PAGE>
 
 
  could affect the successful implementation of our business plans. For
  example, certain provisions of the Telecommunications Act eliminate
  previous prohibitions on the provision of both retail and carriers' carrier
  interLATA long distance services by the RBOCs, subject to compliance by
  such companies with requirements set forth in the Telecommunications Act
  and implemented by the FCC. The FCC has rejected RBOC applications to
  provide interLATA services, including applications from BellSouth covering
  the states of South Carolina and Louisiana. However, the FCC, various
  states and other parties are actively considering actions that could
  expedite approval of interLATA service. BellSouth has filed new
  applications to provide such service in Alabama, Georgia, Kentucky and
  North Carolina and is expected to apply for authority in other states in
  the near future. In addition, legislation to relax the interLATA
  restriction may be considered in Congress. We could be adversely affected
  if the RBOCs, and particularly BellSouth, are allowed to provide wireline
  interLATA long distance services within their own regions before local
  competition is established.
 
   Broadband local services. The FCC has proposed new rules that would give the
   major incumbent local exchange carriers more freedom in these areas if they
   offer such services through separate subsidiaries. Specifically, incumbent
   local exchange carriers would be allowed to offer advanced data services
   through such subsidiaries without dominant carrier regulation and without
   the obligation to make network facilities and services of that affiliate
   available to competitors. The FCC is expected to take action on this matter
   during 1999. We are evaluating how such actions would impact our ability to
   compete with BellSouth and other incumbent local exchange carriers. In a
   related development, cable operators are beginning to offer customers
   broadband access to the Internet, and AT&T has made arrangements to acquire
   the use of such cable network for telecommunications services on an
   exclusive basis. We could be adversely affected if in the future it is not
   able to offer broadband services to certain customers due to limitations on
   its ability to reach such customers over broadband local network facilities.
 
   Additional flexibility for incumbent local exchange carriers. The FCC is
   considering proposed new policies and rules that would grant the incumbent
   local exchange carriers additional flexibility in the pricing of interstate
   access services, and states are considering or are expected to consider
   incumbent local exchange carrier requests for similar regulatory relief with
   respect to intrastate services. Such flexibility is likely to come first for
   services offered in the business market. Any pricing flexibility or other
   significant deregulation of the incumbent local exchange carriers could have
   a material adverse effect on our business. If the incumbent local exchange
   carriers are permitted to engage in increased volume and discount pricing
   practices prior to full competition in local services, or if the incumbent
   local exchange carriers seek to delay implementation of interconnection by
   competitors to their networks or charge excessive interconnection fees, our
   results of operations and financial condition could be adversely affected.
 
   Access charges; universal service. We also could be adversely affected by
   FCC or state regulatory decisions affecting access charges and universal
   service. Such decisions could increase our costs of providing service or
   limit our ability to recover those costs from rates charged to customers.
   The effect on us would be particularly adverse to the extent that it bears a
   disproportionate share of these costs compared to its competitors. These
   matters are the subject of ongoing regulation, and important issues
   regarding the future of access and universal service charges remain to be
   resolved.
 
WE FACE SIGNIFICANT CHALLENGES IN OFFERING LOCAL SERVICES, INCLUDING THE NEED
TO MAKE SIGNIFICANT INVESTMENTS AND COMPETE WITH ESTABLISHED PROVIDERS
 
   We will have to continue to make significant operating and capital
investments, and address numerous operating complexities, to implement our
local exchange services strategy. We are required to:
 
  .  develop new products, services and systems;
 
  .  develop new marketing initiatives;
 
  .  train our sales force in connection with selling these services; and
 
  .  implement the necessary billing and collecting systems for these
     services.
 
 
                                       7
<PAGE>
 
 
   In addition, we expect to continue to face significant pricing and product
competition from the RBOCs, whose core business is providing local dial tone
service and who are currently the dominant providers of services in their
markets. We also will face significant competitive product and pricing
pressures from other incumbent local exchange carriers and from other companies
like us which attempt to compete in the local services market.
 
   We also expect that the addition of local service to our bundle of
telecommunications services will continue to have a negative impact on our
gross margin as a percentage of revenues. This is because the gross margin on
the resale of local services through incumbent local exchange carrier
facilities is lower than the gross margin on our other lines of business. Gross
margin means gross revenues less cost of services.
 
THE LONG DISTANCE TRANSMISSION INDUSTRY IS SUBJECT TO PRICING PRESSURES AND
RISKS OF INDUSTRY OVER-CAPACITY
 
   Since shortly after the AT&T divestiture in 1984, the long distance
transmission industry generally has experienced over-capacity and declining
prices. These trends have exerted downward pressure affecting our Carriers'
Carrier Services and we anticipate that prices for our Carriers' Carrier
Services will continue to decline over the next several years. Dramatic and
substantial price reductions in the long distance industry could force us to
reduce our prices significantly, which could have a material adverse effect on
our business, financial condition and results of operations.
 
   We expect these price declines will occur because:
 
  .  some long distance carriers are expanding their capacity generally;
 
  .  other existing long distance carriers and potential new carriers are
     constructing new fiber optic and other long distance transmission
     networks in the southern United States, and BellSouth is likely to
     receive authority to use its excess capacity to market in-region
     interLATA services;
 
  .  expansion and new construction of transmission networks is likely to
     create substantial excess capacity relative to demand in the short or
     medium term. Persons building such lines are likely to install fiber
     optic cable that provides substantially more transmission capacity than
     will be needed because the cost of the actual fiber is a relatively
     small portion of the overall cost of constructing new lines;
 
  .  recent technological advances may also greatly expand the capacity of
     existing and new fiber optic cable; and
 
  .  the marginal cost of carrying an additional call over existing fiber
     optic cable is extremely low.
 
   An increase in the capacity of our competitors could adversely affect our
business, even if we are also able to increase our capacity. If industry
capacity expands so much that available capacity exceeds overall demand along
any of our routes, severe additional pricing pressure could develop. See "--Our
business is subject to significant competitive pressures."
 
THE LOCAL AND LONG DISTANCE INDUSTRIES ARE SUBJECT TO SIGNIFICANT GOVERNMENT
REGULATION, AND THE REGULATIONS MAY CHANGE
 
   We are required to obtain authorizations from the FCC and state public
utility commissions to offer some of our telecommunications services. We are
also required to file tariffs for many of our services and to comply with local
license or permit requirements relating to installation and operation of our
network. Any of the following could have a material adverse effect on our
business, results of operations and financial condition:
 
  .  failure to maintain proper federal and state tariffs;
 
  .  failure to maintain proper state certifications;
 
  .  failure to comply with federal, state or local laws and regulations;
 
  .  failure to obtain and maintain required licenses and permits;
 
  .  burdensome license or permit requirements to operate in public rights-
     of-way; and
 
  .  burdensome or adverse regulatory requirements or developments.
 
   In addition, we recently entered the newly-created competitive local
telecommunications services industry. The local telephone services market was
opened to competition through the passage of the Telecommunications
 
                                       8
<PAGE>
 
 
Act. Because the FCC and the states are still implementing many of the rules
and policies necessary for local telephone competition, and addressing other
related issues, it is uncertain how successful the Telecommunications Act will
be in creating local competition. There is little practical experience under
the decisions that have been made to date. If we are required to change or
delay our offering of local services as a result of changes in regulatory
requirements, we may experience adverse effects on our business, results of
operations and financial condition.
 
WE DEPEND ON ACCESS SERVICE FROM INCUMBENT LOCAL EXCHANGE CARRIERS TO PROVIDE
LONG DISTANCE AND INTEREXCHANGE PRIVATE SERVICES, AND WE COULD BE ADVERSELY
AFFECTED IF WE DO NOT BENEFIT FROM REDUCED ACCESS CHARGES AT LEAST AS MUCH AS
OUR COMPETITORS
 
   We depend on incumbent local exchange carriers to provide access service for
the origination and termination of our toll long distance traffic and
interexchange private lines. Historically, charges for such access service have
made up a significant percentage of the overall cost of providing long distance
service. In 1998, the FCC implemented changes to its interstate access rules
that, among other things, have reduced per-minute access charges and
substituted new per-line flat rate monthly charges. The FCC also approved
reductions in overall access rates, and established new rules to recover
subsidies to support universal service and other public policies. Additional
access charge adjustments will be implemented in the future. The impact of
these changes on us or our competitors is not yet clear. We could be adversely
affected if we do not experience access cost reductions proportionally
equivalent to those of our competitors. Insofar as new Internet-based
competitors continue to be exempt from these charges, they could enjoy a
significant cost advantage in this area.
 
IF WE ARE UNABLE TO INTERCONNECT WITH BELLSOUTH AND INCUMBENT LOCAL EXCHANGE
CARRIERS ON ACCEPTABLE TERMS, OUR ABILITY TO OFFER LOCAL TELEPHONE SERVICES
WILL BE ADVERSELY AFFECTED
 
   In August 1996, the FCC adopted rules and policies (1) implementing the
local competition provisions of the Telecommunications Act and (2) imposing
obligations on the incumbent local exchange carriers, including the RBOCs, to
enter into interconnection agreements with new competitive entrants like
ITC/\DeltaCom. We depend on our interconnection agreements with incumbent local
exchange carriers such as BellSouth, GTE and Sprint to:
 
  .  provide local telephone service through access to local loops,
     termination service and, in some markets, central office switches of
     such carriers;
 
  .  resell local telephone services that we obtain from the incumbent local
     exchange carriers on a wholesale basis; and
 
  .  obtain operational support to ensure timely delivery to us of network
     elements and wholesale services from the incumbent local exchange
     carriers.
 
   In January 1999, the U.S. Supreme Court upheld the FCC's authority to adopt
and implement these rules, but many aspects of such implementation remain to be
determined. For example, the FCC will be reconsidering the circumstances in
which it is necessary for new carriers to use particular network elements of
the incumbent exchange carriers. Any restriction on the availability of network
elements could have a materially adverse effect on us.
 
   Incumbent local exchange carriers meet their obligations under the
Telecommunications Act through the use of interconnection agreements negotiated
with competitive local exchange carriers under regulatory supervision. Such
agreements have been the subject of ongoing disputes, and key issues remain
open. Our ability to successfully negotiate interconnection agreements on a
timely basis and on favorable terms is critical to our ability to provide local
services on a competitive and profitable basis. We cannot assure you that we
will be able to enter into or renew interconnection agreements that permit us
to offer local services at rates that are both profitable and competitive. Any
successful effort by the incumbent local exchange carriers to deny or
 
                                       9
<PAGE>
 
 
substantially limit our access to their network elements or wholesale services
would have a material adverse effect on our ability to provide local telephone
services. This would have a material adverse effect on our business, results of
operations, and financial condition.
 
   Our interconnection agreement with BellSouth is our most significant
interconnection agreement, enabling us to provide local services in all nine
markets in which BellSouth operates. That agreement currently allows us to
provide local service on a resale basis or by purchasing all unbundled network
elements required to provide local service on a facilities basis, without
having to buy or build our own facilities. The terms of that interconnection
agreement, including interim pricing terms to which we and BellSouth have
agreed, have been approved by state regulatory authorities in all states in
which BellSouth operates. These interim pricing terms remain subject to review
and modification by such authorities. In addition, the BellSouth
interconnection agreement does not resolve all operational issues. We and
BellSouth are continuing to negotiate to resolve those issues.
 
   The BellSouth interconnection agreement expires on July 1, 1999. We have
begun negotiations with BellSouth to renew the terms of the interconnection
agreement. In the event we fail to agree with BellSouth on renewal terms by
July 1, 1999, the agreement provides that the parties will continue to exchange
traffic under the current agreement until such time as renewal terms,
conditions and prices are ordered by a state commission or negotiated by the
parties. The new terms, conditions and prices would then be effective
retroactive to July 1, 1999. We cannot assure you that we will be able to renew
the interconnection agreement with BellSouth on favorable terms, or at all.
 
   Under the Telecommunications Act, the RBOCs will not be permitted to provide
in-region interLATA long distance services until there is adequate competition
in the local services industry. This provides some incentive to the RBOCs to
provide access to their facilities to competitive new entrants such as
ITC/\DeltaCom. We cannot assure you, however, that once BellSouth or other RBOCs
are permitted to offer long distance service, they will continue to be willing
to enter into interconnection agreements with us that will enable us to provide
local services on competitive and profitable terms.
 
WE ARE DEPENDENT UPON RIGHTS OF WAY AND OTHER THIRD PARTY AGREEMENTS TO EXPAND
AND MAINTAIN OUR FIBER OPTIC NETWORK
 
   To construct and maintain our fiber optic network, we have obtained
easements, rights of way, franchises and licenses from various private parties,
including actual and potential competitors and local governments. We cannot
assure you that we will continue to have access to existing rights of way and
franchises after the expiration of our current agreements, or that we will
obtain additional rights necessary to extend our network on reasonable terms.
If a franchise, license or lease agreement were terminated and we were forced
to remove or abandon a significant portion of our network, such termination
could have a material adverse effect on our business, results of operations,
and financial condition. Similarly, our business plans could be adversely
affected if our network expansion is hindered through delays or denials of
rights of way, easements or related licenses on competitive terms.
 
WE ARE DEPENDENT ON OUR NETWORK INFRASTRUCTURE, PORTIONS OF WHICH WE DO NOT OWN
 
   Network agreements may be terminated. We have effectively extended our
network with minimal capital expenditures by entering into marketing and
management agreements with three public utility companies to sell long-haul
private line services on the fiber optic networks owned by these companies.
Under these agreements, which have remaining terms ranging from three to six
years, we generally earn a commission based upon a percentage of the gross
revenues generated by the sale of capacity on the utility's networks. We also
have an agreement to buy and sell capacity with Carolinas Fibernet, which
manages fiber optic facilities in North Carolina and South Carolina.
Cancellation or non-renewal of any of these agreements could materially
adversely affect our business, results of operations, and financial condition.
 
 
                                       10
<PAGE>
 
 
   Some of our agreements are non-exclusive. In addition, two of our three
agreements with the public utility companies are nonexclusive, and we may
encounter competition for capacity on the utilities' networks from other
service providers that enter into comparable arrangements with the utilities.
Any reduction in the amount of capacity that is made available to us could
adversely affect us. To the extent that we are unable to establish similar
arrangements in new markets, we may be required to make additional capital
expenditures to extend our fiber optic network.
 
   We may experience network equipment failures or cable cuts. Our business
also could be materially adversely affected by a cable cut or equipment failure
in our fiber optic network. A substantial portion of our owned and managed
fiber optic network is not protected by electronic redundancy in the event of a
total cable cut. Electronic redundancy enables us to reroute traffic to another
fiber in the same fiber sheath in the event of a partial fiber cut or
electronics failure.
 
WE ARE DEPENDENT ON CERTAIN LARGE CUSTOMERS FOR A SIGNIFICANT PERCENTAGE OF OUR
REVENUES AND WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO RETAIN THOSE
CUSTOMERS
 
   The table below sets forth, for the years ended December 31, 1997 and 1998,
the percentage of our consolidated revenues accounted for by our two largest
Carriers' Carrier customers and our five largest Retail Services customers.
 
<TABLE>
<CAPTION>
                              Year ended December 31, 1997  Year ended December 31, 1998
                              ----------------------------  ----------------------------
<S>                           <C>                           <C>
Two largest Carriers'
 Carrier customers..........  Approximately 12.5% of        Approximately 13.1% of
                              consolidated revenues         consolidated revenues
 
Five largest Retail Services
 customers..................  Approximately 10.0% of        Approximately 8.5% of
                              consolidated revenues         consolidated revenues
</TABLE>
 
   We cannot assure you that we will be able to retain our customers. The loss
of, or a significant decrease of business from, any of our largest customers
would have a material adverse effect on our business, results of operations and
financial condition.
 
   For both Carriers' Carrier Services and Retail Services, our customers
generally have concurrent arrangements with more than one service provider.
This enables our customers to reduce their use of our services and switch to
other providers without incurring significant expense. Our agreements with our
customers generally provide that the customer may terminate service without
penalty in the event of specified types of outages in service and for other
defined causes. As of December 31, 1998, our Carriers' Carrier business had
remaining future long-term contract commitments totaling approximately $139.7
million. Some of those contractual commitments provide that, if the customer is
offered lower pricing with respect to any circuit by another carrier, the
customer's commitment to us will be reduced to the extent we do not match the
price for such circuit and the customer purchases such circuit from the other
carrier.
 
WE ARE DEPENDENT ON SOPHISTICATED BILLING, CUSTOMER SERVICE AND INFORMATION
SYSTEMS
 
   We depend on sophisticated information and processing systems to grow,
monitor costs, bill customers, provision customer orders and achieve operating
efficiencies. As we increase our provision of dial tone and switched local
access services, the need for enhanced billing and information systems will
also increase. Our inability to identify adequately all of our information and
processing needs, or to upgrade systems as necessary, could have a material
adverse effect on our ability to reach our objectives and on our financial
condition and results of operations.
 
FAILURE TO OBTAIN YEAR 2000 COMPLIANCE MAY HAVE ADVERSE EFFECTS ON US
 
   The Year 2000 issue is the result of computer programs using two digits,
rather than four, to define the applicable year. Because of this programming
convention, software, hardware or firmware may recognize a
 
                                       11
<PAGE>
 
 
date using "00" as the year 1900 rather than the year 2000. This could result
in system failures, miscalculations or errors causing disruptions of operations
or other business problems, including, among others, a temporary inability to
process transactions, send invoices, or engage in similar normal business
activities. Our Year 2000 readiness program is described below. However, we
cannot know the actual effects of the Year 2000 issue on our business and
operations until the Year 2000. If we and/or our major vendors, third party
network service providers, and other material service providers and customers
fail to adequately address our respective Year 2000 issues in a timely manner,
this could have a material adverse effect on our business, results of
operations, and financial condition.
 
   We have undertaken a comprehensive program to address the Year 2000 issue
with respect to the following:
 
  .  our information technology and operating systems, including our network
     switching, customer service, call detail and billing systems;
 
  .  our non-information technology systems, such as buildings, plant,
     equipment and other infrastructure systems that may contain embedded
     microcontroller technology;
 
  .  the systems of our major vendors, third party network service providers
     and other material service providers, insofar as they relate to our
     business; and
 
  .  our major Carriers' Carrier and Retail Services customers.
 
   Our Year 2000 program involves:
 
  .  a wide-ranging assessment of the Year 2000 problems that may affect us;
 
  .  the development of remedies to address the problems discovered in the
     assessment phase;
 
  .  testing of the remedies; and
 
  .  the preparation of contingency plans to deal with worst case scenarios.
 
   As part of the assessment phase of this program, we have identified
substantially all of the major components of the systems described above. To
determine the extent to which those systems are vulnerable to the Year 2000
issue, we:
 
  .  evaluated our internally developed software applications; and
 
  .  made inquiries of substantially all of our significant hardware,
     software and other equipment vendors, third party network service
     providers, other material service providers and material customers
     requesting detailed, written information related to Year 2000
     compliance.
 
   To date, we have received and analyzed responses from a substantial majority
of our major vendors and service providers and from our significant Carriers'
Carrier and Retail Services customers. We are investigating, and intend to
closely monitor, the Year 2000 readiness of the three public utilities that own
and operate approximately 3,650 miles of our approximately 7,800-mile fiber
optic network. All of those utilities have indicated that they are addressing
the issue. In addition, we have begun to follow up with respect to those
entities that have not yet responded to our Year 2000 inquiries.
 
   Based upon the results to date of our assessment efforts, we have begun our
remediation and testing phase. We intend to complete this phase by the second
quarter of 1999. After we complete our internal, integrated systems testing, we
intend to conduct laboratory-simulated integrated systems testing in an effort
to demonstrate Year 2000 compliance of our systems as they interface with
external systems and equipment of major vendors, third party network providers,
other material service providers and customers. We have begun to develop
contingency plans to handle our most reasonably-likely worst case Year 2000
scenarios, which have not yet been identified fully. We intend to complete our
determination of worst case scenarios after we have received and analyzed
responses to substantially all of the inquiries we have made. Following that
phase, we intend to develop a timetable for completing our contingency plans.
 
                                       12
<PAGE>
 
 
   Through the end of 1998, we incurred approximately $1.1 million in costs for
our Year 2000 program. We currently estimate that, in 1999, we will incur
additional expenses which are not expected to exceed approximately $1.0 million
to complete our Year 2000 compliance work. These costs, which may vary from the
estimates, have been, and will continue to be, expensed as incurred.
 
WE ARE SUBJECT TO RISKS ASSOCIATED WITH RAPID CHANGES IN TECHNOLOGY
 
   The telecommunications industry is subject to rapid and significant changes
in technology. In addition, we may be required to select in advance one
emerging technology over another, but it will be impossible to predict with any
certainty, at the time we are required to make our investment, which technology
will prove to be the most economic, efficient or capable of attracting customer
usage. Unexpected developments, or our failure to adapt to them, could have a
material adverse effect on our business, results of operations and financial
condition.
 
OUR SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL
 
   Our business is currently managed by a small number of key management and
operating personnel. We do not have any employment agreements with, nor do we
maintain "key man" insurance on, these employees. The loss of the services of
key personnel, or the inability to attract, recruit and retain sufficient or
additional qualified personnel, could have a material adverse effect on our
business, results of operations and financial condition.
 
OUR OPERATING RESULTS COULD VARY SIGNIFICANTLY FROM PERIOD TO PERIOD PRIMARILY
DUE TO HIGH EXPENSES
 
   Our revenues and operating results could vary significantly from period to
period for many reasons, including:
 
  .  significant expenses associated with the construction and expansion of
     our network and services;
 
  .  competition and regulatory developments;
 
  .  changes in market growth rates for our products and services;
 
  .  availability or announcement of alternative technologies; and
 
  .  general economic conditions.
 
   These factors and any resulting fluctuations in our operating results will
make period to period comparisons of our financial condition less meaningful
and could have a material adverse effect on our business, results of operations
and financial condition.
 
WE HAVE SEVERAL LARGE STOCKHOLDERS WHO MAY INFLUENCE OUR AFFAIRS
 
   As of December 31, 1998, Campbell B. Lanier, III beneficially owned
approximately 16% of the outstanding common stock. To the extent that Mr.
Lanier exercises his voting and investment rights in concert with other
stockholders, Mr. Lanier and such other stockholders may be able to exercise
control over our business by virtue of their voting power with respect to the
election of directors and other actions requiring stockholder approval.
 
WE DO NOT PAY DIVIDENDS
 
   We have never declared or paid any cash dividends on our capital stock and
we do not anticipate paying cash dividends in the foreseeable future.
Additionally, our Indentures and our revolving credit facility contain
restrictions on our ability to pay dividends.
 
 
                                       13
<PAGE>
 
 
SEVERAL PROVISIONS IN OUR CERTIFICATE OF INCORPORATION AND BYLAWS COULD HAVE
EFFECTS THAT CONFLICT WITH THE INTERESTS OF OUR STOCKHOLDERS
 
   Our certificate of incorporation and bylaws and the General Corporation Law
of the State of Delaware contain provisions that could make it more difficult
for a third party to acquire control of us, even if such change in control
would be beneficial to our stockholders. In particular, the classification of
our Board of Directors may delay or impede the removal of incumbent directors
and therefore could have the effect of delaying a change in control. In
addition, our certificate of incorporation authorizes the Board of Directors to
issue shares of our preferred stock, in one or more series, without further
stockholder approval and upon such terms and conditions, and having such
rights, privileges and preferences, as the Board of Directors may determine.
Any such issuances of preferred stock could make it more difficult for a third
party to acquire control of us.
 
THE MARKET PRICE OF OUR COMMON STOCK HAS FLUCTUATED SIGNFICANTLY
 
   The market price of our common stock has fluctuated over a wide range since
it began trading publicly after our initial public offering in October 1997.
During calendar year 1998, the high last reported sale price of our common
stock on the Nasdaq National Market was $25.50 and the low last reported sale
price of our common stock was $8.31. The market price may continue to fluctuate
in the future.
 
   The market price of our common stock could be subject to significant
fluctuations in response to various factors and events, including, among other
things,
 
  .  the depth and liquidity of the trading market for our common stock
 
  .  quarterly variations in actual or anticipated operating results and
     growth rates
 
  .  changes in estimates by analysts
 
  .  market conditions in the industry
 
  .  announcements by competitors
 
  .  regulatory actions and
 
  .  general economic conditions.
 
   In addition, the stock market in recent years has experienced significant
price and volume fluctuations that have often been unrelated to the operating
performance of companies. These fluctuations have particularly affected the
market prices of the stocks of telecommunications companies.
 
   Any of these events would likely result in a material adverse effect on the
market price of our common stock.
 
                                       14
<PAGE>
 
 
              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
   This prospectus and the information incorporated by reference in it, as well
as any prospectus supplement that accompanies it, include "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. We intend the forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements in
these sections. All statements regarding our expected financial position and
operating results, our business strategy and our financing plans are forward-
looking statements. These statements can sometimes be identified by our use of
forward-looking words such as "may," "will," "anticipate," "estimate,"
"expect," or "intend." We cannot promise you that our expectations in such
forward-looking statements will turn out to be correct. Our actual results
could be materially different from and worse than our expectations. Important
factors that could cause our actual results to be materially different from our
expectations include those discussed in this prospectus under the caption "Risk
Factors" beginning on page 1 of this prospectus. We undertake no obligation to
update or revise publicly any forward-looking statements, whether as a result
of new information, further events or otherwise.
 
   As used in this prospectus and the accompanying prospectus supplement,
"ITC/\DeltaCom" means ITC/\DeltaCom, Inc., a Delaware corporation.
 
                                       15
<PAGE>
 
 
                             ABOUT THIS PROSPECTUS
 
   This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process under the Securities Act of 1933.
Under the shelf process, we may, from time to time, sell any combination of the
offered securities described in this prospectus in one or more offerings up to
a total dollar amount of $300,000,000.
 
   This prospectus and the accompanying prospectus supplement do not contain
all of the information included in the registration statement. We have omitted
parts of the registration statement as permitted by the rules and regulations
of the SEC. For further information, we refer you to the registration statement
on Form S-3, including its exhibits. Statements contained in this prospectus
and any accompanying prospectus supplement about the provisions or contents of
any agreement or other document are not necessarily complete. If SEC rules and
regulations require that any agreement or document be filed as an exhibit to
the registration statement, you should refer to that agreement or document for
a complete description of these matters. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of each document.
 
   This prospectus provides you with a general description of the offered
securities. Each time we sell offered securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change any
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional information
described below under the heading "Where You Can Find More Information."
 
                      WHERE YOU CAN FIND MORE INFORMATION
 
   We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy materials that we have filed
with the SEC, including the registration statement, at the following SEC public
reference rooms:
 
 450 Fifth Street, N.W.      7 World Trade Center      500 West Madison Street
        Room 1024                 Suite 1300                 Suite 1400
 Washington, D.C. 20549    New York, New York 10048    Chicago, Illinois 60661
 
   Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms.
 
   Our common stock is quoted on The Nasdaq National Market under the symbol
"ITCD," and our SEC filings can also be read at the following Nasdaq address:
 
                               Nasdaq Operations
                              1735 K Street, N.W.
                             Washington, D.C. 20006
 
Our SEC filings are also available to the public on the SEC's Web site at
http://www.sec.gov.
 
   The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, including any filings after the date of initial filing
and prior to the effectiveness of the registration statement of which this
prospectus is a part, until we have sold all of the offered securities to which
this prospectus relates or the offering is otherwise terminated.
 
 
                                       16
<PAGE>
 
 
  .  Our Annual Report on Form 10-K for our fiscal year ended December 31,
     1998, filed with the SEC on March 25, 1999.
 
  .  Description of our common stock included in a registration statement on
     Form 8-A, filed with the SEC on October 22, 1997, including any
     amendments or reports filed for the purpose of updating that
     description.
 
   You may request a copy of these filings, at no cost, by writing to us at the
following address or telephoning us at (706) 645-3880 between the hours of 9:00
a.m. and 4:00 p.m., West Point, Georgia local time:
 
                               ITC/\DeltaCom, Inc.
                         Attention: Investor Relations
                            1241 O.G. Skinner Drive
                           West Point, Georgia 31833
 
                                       17
<PAGE>
 
 
                              ABOUT ITC/\DELTACOM
 
   We provide integrated voice and data telecommunications services on a retail
basis to mid-sized and major regional businesses in the southern United States.
We are also a leading regional provider of wholesale long-haul services to
other telecommunications companies. In connection with these businesses, we
own, operate and manage an extensive fiber optic network in the southern United
States.
 
Our Retail Services Segment
 
   We provide integrated retail telecommunications services to mid-sized and
major regional businesses in a bundled package tailored to the business
customer's specific needs. These Retail Services include:
 
  .  local exchange telephone services;
 
  .  long distance services;
 
  .  calling, calling card and operator services;
 
  .  Asynchronous Transfer Mode, or ATM, frame relay, high capacity broadband
     private line services;
 
  .  Internet, Intranet and Web page hosting and development services; and
 
  .  customer premise equipment sales, installation and repair.
 
   In connection with offering local exchange services, we have entered into
interconnection agreements with the following incumbent local exchange
carriers:
 
  .  BellSouth Telecommunications, Inc., for all of its markets;
 
  .  GTE Corporation, for its Alabama market; and
 
  .  Sprint Corporation, for its Florida markets.
 
   The interconnection agreements allow us to resell the local exchange
services of the incumbent carrier and to interconnect our network with their
networks. This allows us to offer local exchange services to our current
customer base and to enter new markets with minimal capital expenditures. We
intend to complete interconnection agreements with GTE, SBC and Sprint for
certain other markets that we serve or intend to serve.
 
Our Carriers' Carrier Services Segment
 
   We also provide wholesale long-haul services, which we call our "Carriers'
Carrier Services," to other telecommunications carriers. This means we sell
capacity on our network to, and switch and transport telecommunications traffic
for, such carriers. Our Carriers' Carrier customers include AT&T Corp., MCI
WorldCom, Inc., Sprint Corporation, Cable & Wireless Communications, Inc., and
Allnet Communications Services, Inc. d/b/a Frontier Communications Services.
 
Our Principal Executive Offices, Telephone Number And Internet Address
 
   Our headquarters are located at 1241 O.G. Skinner Drive, West Point, Georgia
31833, our telephone number at this address is (706) 645-3880 and our Internet
Web site is located at http://www.itcdeltacom.com. Information contained on our
Web site is not, and should not be deemed to be, a part of this prospectus.
 
                                       18
<PAGE>
 
 
                                USE OF PROCEEDS
 
   Unless otherwise indicated in the applicable prospectus supplement, we
anticipate that any net proceeds from the sale of offered securities will be
used:
 
  .  to fund an accelerated market expansion of our telecommunications
     business, including expansion of our fiber optic network, expansion of
     our Internet service provider local telecommunications services and the
     opening of new sales offices; and
 
  .  for additional working capital and other general corporate purposes.
 
   The precise allocation of funds among these uses will depend on future
technological, regulatory and other developments in or affecting our business,
the competitive climate in which we operate and the emergence of future
opportunities.
 
   As part of our business strategy, we intend to continue to evaluate
potential acquisitions, joint ventures and strategic alliances in areas such as
wireline and wireless services, network construction and infrastructure and
Internet access. We have no definitive agreement with respect to any
acquisition, although from time to time we have discussions with other
companies and assess opportunities on an on-going basis. A portion of the net
proceeds from the sale of offered securities may be used to fund any such
acquisitions, joint ventures or strategic alliances.
 
   When we offer a particular series of offered securities, the prospectus
supplement relating to that offering will set forth the intended use of the net
proceeds received from that offering. Pending the specific application of the
net proceeds, we expect to invest the proceeds from the sale of offered
securities in short-term, interest-bearing instruments or other investment-
grade debt securities or to reduce any indebtedness outstanding under our
secured revolving bank credit facility.
 
                                 ERISA MATTERS
 
   ITC/\DeltaCom and its subsidiaries may each be considered a "party in
interest," within the meaning of the Employee Retirement Income Security Act,
or a "disqualified person," within the meaning of Section 4975 of the Internal
Revenue Code, with respect to many employee benefit plans that are subject to
ERISA. The purchase of offered securities by an ERISA plan, including an
individual retirement plan, that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of the Internal
Revenue Code and with respect to which ITC/\DeltaCom or any of its affiliates is
a service provider, or otherwise is a party in interest or a disqualified
person, may constitute or result in a prohibited transaction under ERISA or the
Internal Revenue Code, unless such offered securities are acquired pursuant to
and in accordance with an applicable federal statutory exemption, or
administrative exemption issued on a class-wide basis by the United States
Department of Labor. Any pension or other employee benefit plan proposing to
acquire any offered securities should consult with its counsel.
 
                                       19
<PAGE>
 

 
                         RATIO OF EARNINGS TO COMBINED
                  FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
 
   The following table sets forth ITC/\DeltaCom's ratio of earnings to combined
fixed charges and preferred stock dividends on a historical basis for the
periods indicated. ITC/\DeltaCom has 1,480,771 shares of Series A Preferred
Stock issued and outstanding. No dividends have been declared or have accrued
on this preferred stock. Therefore, the ratio of earnings to combined fixed
charges and preferred stock dividends is the same as the ratio of earnings to
fixed charges.
 
   The ratio of earnings to combined fixed charges and preferred stock
dividends is computed by dividing income from continuing operations before
income taxes and fixed charges and preferred stock dividends by total fixed
charges and preferred stock dividends. Fixed charges represent interest expense
(including capitalized interest), the amortization of debt issuance costs, and
the portion of rental expense that represents interest.
 
<TABLE>
<CAPTION>
                                                          Fiscal Year
                                                 ------------------------------
                                                  1998   1997  1996  1995 1994
                                                 ------ ------ ----- ---- -----
                                                  (in thousands, except ratio
                                                             data)
<S>                                              <C>    <C>    <C>   <C>  <C>
Ratio of earnings to combined fixed charges and
 preferred stock
 dividends.....................................     --     --    --  --    2.65
Deficiency of earnings to combined fixed
 charges and preferred stock dividends.........  32,360 13,663 5,143 807   N/A
</TABLE>
- --------
 
                                       20
<PAGE>
 
 
                          DESCRIPTION OF COMMON STOCK
 
   The following description sets forth the general terms of the common stock
which ITC/\DeltaCom may issue. The description set forth below and in any
prospectus supplement does not purport to be complete and is subject to and
qualified in its entirety by reference to ITC/\DeltaCom's certificate of
incorporation and bylaws, each of which will be made available upon request.
 
General
 
   Our certificate of incorporation provides that we have authority to issue
90,000,000 shares of our common stock, par value $.01 per share. At March 15,
1999, there were 51,553,197 shares of our common stock issued and outstanding.
 
   Voting Rights. Each holder of shares of our common stock is entitled to
attend all special and annual meetings of our stockholders. In addition, each
holder is entitled, together with the holders of all other classes of stock
entitled to attend the special and annual meetings of our stockholders, to cast
one vote for each outstanding share of common stock held upon any matter or
thing, including, without limitation, the election of one or more directors,
properly considered and acted upon by the stockholders.
 
   Liquidation Rights. The holders of our common stock and the holders of any
class or series of stock entitled to participate with the holders of our common
stock as to the distribution of assets in the event of any dissolution,
liquidation, or winding up of ITC/\DeltaCom, whether voluntary or involuntary,
will become entitled to participate in the distribution of any assets of
ITC/\DeltaCom remaining after ITC/\DeltaCom has paid, or provided for the
payment of, all of its debts and liabilities and after ITC/\DeltaCom has paid,
or set aside for payment, to the holders of any class of stock having preference
over the common stock in the event of dissolution, liquidation or winding up,
the full preferential amounts, if any, to which they are entitled.
 
   Dividends. Dividends may be paid on the common stock and on any class or
series of stock entitled to participate with the common stock as to dividends
on an equal per-share basis, but only when and as declared by our Board of
Directors. ITC/\DeltaCom has never paid cash dividends, and the terms of the
indentures pursuant to which our senior notes have been issued restrict the
payment of dividends in the future.
 
   No holder of our common stock has any preemptive right to subscribe for any
of our securities, nor does any holder of our common stock have conversion
rights. The rights, privileges, preferences and priorities of holders of our
common stock are subject to, and may be adversely affected by, the rights of
the holders of our Series A Preferred Stock and shares of any series of
Preferred Stock which we may designate and issue in the future. See
"Description of Preferred Stock."
 
Some Important Charter and Statutory Provisions
 
   Our certificate of incorporation provides for the division of our Board of
Directors into three classes of directors, each serving staggered, three-year
terms. The certificate further provides that any alteration, amendment or
repeal of certain sections of the certificate relating to the election and
classification of the Board of Directors, indemnification and the vote
requirements for such amendments to the certificate requires the approval of
the holders of at least two-thirds of the shares entitled to vote thereon.
These provisions may have the effect of deterring hostile takeovers or delaying
changes in control or management of ITC/\DeltaCom.
 
   ITC/\DeltaCom is subject to the provisions of Section 203 of the Delaware
Corporation Law. In general, the statute prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless:
 
  .  prior to that date, the board of directors approved either the business
     combination or the transaction that resulted in the stockholder becoming
     an interested stockholder;
 
                                       21
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  .  upon consummation of the transaction that resulted in that person
     becoming an interested stockholder, the interested stockholder owned at
     least 85% of the voting stock of the corporation outstanding at the time
     the transaction commenced, excluding, for purposes of determining the
     number of shares outstanding, shares owned by certain directors or
     certain employee stock plans; or
 
  .  on or after the date the stockholder became an interested stockholder,
     the business combination is approved by the board of directors and
     authorized by the affirmative vote, and not by the written consent, of
     at least two-thirds of the outstanding voting stock, excluding the stock
     owned by the interested stockholder.
 
A "business combination" includes a merger, asset sale, or other transaction
resulting in a financial benefit to the interested stockholder. An "interested
stockholder" is a person who, other than the corporation and any direct or
indirect majority-owned subsidiary of the corporation, together with
affiliates and associates, owns or, as an affiliate or associate, within three
years prior, did own, 15% or more of the corporation's outstanding voting
stock.
 
   The certificate of incorporation empowers our Board of Directors to redeem
any of ITC/\DeltaCom's outstanding capital stock, at a price determined by the
Board, which price shall be at least equal to the lesser of:
 
  .  the fair market value as determined in accordance with the certificate
     of incorporation; or
 
  .  in the case of a "Disqualified Holder," the lesser of fair market value
     or such holder's purchase price (if the stock was purchased within one
     year of such redemption) to the extent necessary to prevent the loss or
     secure the reinstatement of any license, operating authority or
     franchise from any governmental agency.
 
A "Disqualified Holder" is any holder of shares of stock of ITC/\DeltaCom whose
holding of that stock may result in the loss of, or the failure to secure the
reinstatement of, any license or franchise from any governmental agency held
by ITC/\DeltaCom or any of its subsidiaries to conduct any portion of the
business of ITC/\DeltaCom or any of its subsidiaries. Under the
Telecommunications Act of 1996, non-U.S. citizens or their representatives,
foreign governments of their representatives, or corporations organized under
the laws of a foreign country may not own, in the aggregate, more than 20% of
a common carrier licensee or more than 25% of the parent of a common carrier
licensee if the FCC determines that the public interest would be served by
prohibiting such ownership. Additionally, the FCC's rules may under certain
conditions limit the size of investments by foreign telecommunications
carriers in U.S. international carriers.
 
Transfer Agent and Registrar
 
   The transfer agent and registrar for our common stock will be American
Stock Transfer & Trust Company.
 
                                      22
<PAGE>
 
 
                        DESCRIPTION OF PREFERRED STOCK
 
   The following description sets forth the general terms of the preferred
stock which ITC/\DeltaCom may issue. The description set forth below and in
any prospectus supplement does not purport to be complete and is subject to
and qualified in its entirety by reference to our certificate of
incorporation, the applicable certificate of designation to our certificate
determining the terms of the related series of preferred stock and our bylaws,
each of which will be made available upon request.
 
General
 
   Our certificate of incorporation authorizes our Board of Directors from
time to time and without further stockholder action, to provide for the
issuance of up to 5,000,00 shares of preferred stock in one or more series,
and to fix the relative rights and preferences of the shares, including voting
powers, dividend rights, liquidation preferences, redemption rights and
conversion privileges. As of the date of this prospectus, our Board of
Directors has not provided for the issuance of any series of preferred stock,
other than the Series A Preferred Stock, and there are no agreements or
understandings for the issuance of any other series of preferred stock. See
"--Series A Preferred Stock." At March 15, 1999, there were 1,480,771 shares
of our Series A Preferred Stock issued and outstanding.
 
   Because of its broad discretion with respect to the creation and issuance
of preferred stock without stockholder approval, our Board of Directors could
adversely affect the voting power of the holders of our common stock and, by
issuing shares of preferred stock with certain voting, conversion and/or
redemption rights, could discourage any attempt to obtain control of
ITC/\DeltaCom.
 
Series A Preferred Stock
 
   Conversion rights. Holders of Series A Preferred Stock have the right, at
any time after March 14, 2002, to convert each share of Series A Preferred
Stock into one share of our common stock, subject to adjustment for stock
splits, stock dividends, recapitalizations and other specified events.
 
   Liquidation rights. In the event of any dissolution, liquidation or winding
up of ITC/\DeltaCom, whether voluntary or involuntary, holders of Series A
Preferred Stock will be entitled to receive a distribution of $13.17 per
share, plus any dividends declared and unpaid, prior to any payment or
distribution of assets to holders of our common stock. Holders of our common
stock will then be entitled to any equivalent distribution of $13.17 per
share, plus any dividends declared and unpaid, out of the remaining assets of
ITC/\DeltaCom. Holders of Series A Preferred Stock and our common stock will be
entitled to share ratably in the distribution of any remaining assets of
ITC/\DeltaCom, with holders of Series A Preferred Stock entitled to receive an
amount equal to the distribution made in respect of the number of shares of
common stock into which the Series A Preferred Stock is then convertible.
 
   Dividend rights. The holders of Series A Preferred Stock are entitled to
receive, when, as and if declared by our Board of Directors out of funds
legally available therefor, dividends in an amount per share of Series A
Preferred Stock equal to the dividends payable on the number of shares of
common stock into which one share of Series A Preferred Stock is then
convertible. So long as any shares of Series A Preferred Stock are
outstanding, no dividends may be declared or paid on any class or series of
capital stock ranking on a parity with the Series A Preferred Stock as to
dividends.
 
   No redemption rights. The Series A Preferred Stock is not subject to
mandatory or optional redemption.
 
   Voting rights. Except as set forth in the following sentence, holders of
Series A Preferred Stock have no voting rights. The affirmative vote of
holders of at least two-thirds of the shares of Series A Preferred Stock
outstanding is necessary for:
 
  .  the authorization or issuance of any class of stock ranking prior to the
     Series A Preferred Stock as to dividends or the distribution of assets
     upon dissolution, liquidation or winding up of the Company;
 
  .  an increase in the authorized or issued amount of Series A Preferred
     Stock; or
 
                                      23
<PAGE>
 
 
  .  the amendment, alteration or repeal, whether by merger, consolidation or
     otherwise, of any provision of the certificate of incorporation that
     would affect any right, preference or voting power of the Series A
     Preferred Stock.
 
Terms of the Preferred Stock that We May Offer and Sell to You
 
   You should refer to the prospectus supplement relating to the class or
series of preferred stock being offered for the specific terms of that class or
series, including:
 
  (1) the title and stated value of the preferred stock being offered;
 
  (2) the number of shares of preferred stock being offered, their
      liquidation preference per share and their purchase price;
 
  (3) the dividend rate(s), period(s) and/or payment date(s) or method(s) of
      calculating the payment date(s) applicable to the preferred stock being
      offered;
 
  (4) whether dividends shall be cumulative or non-cumulative and, if
      cumulative, the date from which dividends on the preferred stock being
      offered shall accumulate;
 
  (5) the procedures for any auction and remarketing, if any, for the
      preferred stock being offered;
 
  (6) the provisions for a sinking fund, if any, for the preferred stock
      being offered;
 
  (7) the provisions for redemption, if applicable, of the preferred stock
      being offered;
 
  (8) any listing of the preferred stock being offered on any securities
      exchange or market;
 
  (9) the terms and conditions, if applicable, upon which the preferred stock
      being offered will be convertible into common stock of ITC/\DeltaCom,
      including the conversion price, or the manner of calculating the
      conversion price, and the conversion period;
 
  (10) voting rights, if any, of the preferred stock being offered;
 
  (11) whether interests in the preferred stock being offered will be
       represented by depositary shares;
 
  (12) a discussion of any material and/or special United States federal
       income tax considerations applicable to the preferred stock being
       offered;
 
  (13) the relative ranking and preferences of the preferred stock being
       offered as to dividend rights and rights upon liquidation, dissolution
       or winding up of the affairs of ITC/\DeltaCom;
 
  (14) any limitations on the issuance of any class or series of preferred
       stock ranking senior to or on a parity with the series of preferred
       stock being offered as to dividend rights and rights upon liquidation,
       dissolution or winding up of the affairs of ITC/\DeltaCom; and
 
  (15) any other specific terms, preferences, rights, limitations or
       restrictions of the preferred stock being offered.
 
Rank
 
   Unless otherwise specified in the applicable prospectus supplement, the
preferred stock will, with respect to distribution rights and rights upon
liquidation, dissolution or winding up of ITC/\DeltaCom, rank:
 
  (1) senior to all classes or series of common stock of ITC/\DeltaCom and to
      all equity securities the terms of which specifically provide that such
      equity securities rank junior to the preferred stock being offered;
 
                                       24
<PAGE>
 
 
  (2) on a parity with all equity securities issued by ITC/\DeltaCom other
      than those referred to in clauses 1 and 3; and
 
  (3) junior to all equity securities issued by ITC/\DeltaCom the terms of
      which specifically provide that such equity securities rank senior to
      the preferred stock being offered,
 
   The term "equity securities" does not include convertible debt securities.
 
DISTRIBUTIONS
 
   Holders of the preferred stock of each series will be entitled to receive,
when, as and if declared by our board of directors, out of assets of
ITC/\DeltaCom legally available for payment to stockholders, cash distributions,
or distributions in kind or in other property if expressly permitted and
described in the applicable prospectus supplement, at such rates and on such
dates as will be set forth in the applicable prospectus supplement. Each such
distribution shall be payable to holders of record as they appear on the stock
transfer books of ITC/\DeltaCom on such record dates as shall be fixed by our
board of directors. Distributions on any series of preferred stock, if
cumulative, will be cumulative from and after the date set forth in the
applicable prospectus supplement.
 
REDEMPTION
 
   If so provided in the applicable prospectus supplement, the preferred stock
will be subject to mandatory redemption or redemption at the option of
ITC/\DeltaCom, in whole or in part, in each case upon the terms, at the times
and at the redemption prices set forth in such prospectus supplement.
 
LIQUIDATION PREFERENCE
 
   Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of ITC/\DeltaCom, then, before any distribution or payment shall be
made to the holders of any common stock or any other class or series of shares
of capital stock of ITC/\DeltaCom ranking junior to the preferred stock in the
distribution of assets upon any liquidation, dissolution or winding up of
ITC/\DeltaCom, the holders of each series of preferred stock shall be entitled
to receive out of assets of ITC/\DeltaCom legally available for distribution to
shareholders liquidating distributions in the amount of the liquidation
preference set forth in the applicable prospectus supplement, plus an amount
equal to all accumulated and unpaid distributions. After payment of the full
amount of the liquidating distributions to which they are entitled, the holders
of shares of preferred stock will have no right or claim to any of the
remaining assets of ITC/\DeltaCom. If, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of ITC/\DeltaCom
are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of preferred stock and the corresponding amounts payable on
all shares of other classes or series of shares of capital stock of
ITC/\DeltaCom ranking on a parity with the preferred stock in the distribution
of assets, then the holders of the preferred stock and all other such classes
or series of shares of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
 
   If liquidating distributions shall have been made in full to all holders of
preferred stock, the remaining assets of ITC/\DeltaCom shall be distributed
among the holders of any other classes or series of shares of capital stock
ranking junior to the preferred stock upon liquidation, dissolution or winding
up, according to their respective rights and preferences and in each case
according to their respective number of shares. For such purposes, the
consolidation or merger of ITC/\DeltaCom with or into any other corporation,
trust or entity, or the sale, lease or conveyance of all or substantially all
of the property or business of ITC/\DeltaCom, shall not be deemed to constitute
a liquidation, dissolution or winding up of ITC/\DeltaCom.
 
VOTING RIGHTS
 
   Holders of preferred stock will not have any voting rights, except as set
forth below or as otherwise from time to time required by law, or as indicated
in the applicable prospectus supplement.
 
                                       25
<PAGE>
 
 
   Under the Delaware General Corporation Law, holders of outstanding shares of
a series of preferred stock may be entitled to vote as a separate class on a
proposed amendment to the terms of that series of preferred stock or
ITC/\DeltaCom's certificate if the amendment would:
 
  (1) increase or decrease the aggregate number of authorized shares of that
      series of preferred stock;
 
  (2) increase or decrease the par value of that series of preferred stock;
      or
 
  (3) alter or change the powers, preferences or special rights of the shares
      of such class so as to affect them adversely,
 
   in which case the approval of proposed amendment would require the
affirmative vote of at least a majority of the outstanding shares of that
series of preferred stock.
 
Conversion Rights
 
   The terms and conditions, if any, upon which any series of preferred stock
is convertible into common stock will be set forth in the applicable prospectus
supplement relating thereto. Such terms will include the number of shares of
common stock into which the shares of preferred stock are convertible, the
conversion price or the manner of calculating the conversion price, the
conversion date(s) or period(s), provisions as to whether conversion will be at
the option of the holders of the preferred stock or at ITC/\DeltaCom's option,
the events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such series of preferred
stock.
 
Transfer Agent and Registrar
 
   The transfer agent and registrar for the preferred stock will be set forth
in the applicable prospectus supplement.
 
                                       26
<PAGE>
 
 
                        DESCRIPTION OF DEPOSITARY SHARES
 
General
 
   ITC/\DeltaCom may issue depositary receipts for depositary shares, each of
which will represent a fractional interest of a share of a particular series of
preferred stock, as specified in the applicable prospectus supplement. Shares
of preferred stock of each series represented by depositary shares will be
deposited under a separate deposit agreement among ITC/\DeltaCom and the
"depositary" named in the deposit agreement. Subject to the terms of the
deposit agreement, each owner of a depositary receipt will be entitled, in
proportion to the fractional interest of a share of a particular series of
preferred stock represented by the depositary shares evidenced by that
depositary receipt, to all the rights and preferences of the preferred stock
represented by those depositary shares, including dividend, voting, conversion,
redemption and liquidation rights.
 
   The depositary shares will be evidenced by depositary receipts issued
pursuant to the applicable deposit agreement. Immediately following the
issuance and delivery of the preferred stock by ITC/\DeltaCom to the depositary,
ITC/\DeltaCom will cause the depositary to issue, on behalf of ITC/\DeltaCom,
the depositary receipts. Copies of the applicable form of deposit agreement and
depositary receipt may be obtained from ITC/\DeltaCom upon request, and the
statements made in this summary relating to the deposit agreement and the
depositary receipts to be issued under the deposit agreement are summaries of
provisions of the deposit agreement and the related depositary receipts. This
summary does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all of the provisions of the applicable deposit
agreement and related depositary receipts.
 
Dividends and Other Distributions
 
   The depositary will distribute all cash dividends or other cash
distributions received in respect of the preferred stock to the record holders
of depositary receipts evidencing the related depositary shares in proportion
to the number of such depositary receipts owned by such holders, subject to the
obligations of holders to file proofs, certificates and other information and
to pay some charges and expenses to the depositary.
 
   In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary receipts
entitled to that property, subject to the obligations of holders to file
proofs, certificates and other information and to pay some charges and expenses
to the depositary, unless the depositary determines that it is not feasible to
make the distribution, in which case the depositary may, with the approval of
ITC/\DeltaCom, sell the property and distribute the net proceeds from the sale
to the holders.
 
   No distribution will be made in respect of any depositary share to the
extent that it represents any preferred stock converted into other securities.
 
Withdrawal of Stock
 
   Upon surrender of the depositary receipts at the corporate trust office of
the depositary, unless the related depositary shares have previously been
called for redemption or converted into other securities, the holders of those
depositary receipts will be entitled to delivery at the corporate trust office,
to or upon the holder's order, of the number of whole or fractional shares of
the preferred stock and any money or other property represented by the
depositary shares evidenced by the depositary receipts. Holders of depositary
receipts will be entitled to receive whole or fractional shares of the related
preferred stock on the basis of the proportion of preferred stock represented
by the depositary share as specified in the applicable prospectus supplement,
but holders of the shares of preferred stock will not thereafter be entitled to
receive depositary shares therefor. If the depositary receipts delivered by the
holder evidence a number of depositary shares in excess of the number of
depositary shares representing the number of shares of preferred stock to be
withdrawn, the depositary will deliver to the holder at the same time a new
depositary receipt evidencing the excess number of depositary shares.
 
                                       27
<PAGE>
 
 
Redemption of Depositary Shares
 
   Whenever ITC/\DeltaCom redeems shares of preferred stock held by the
depositary, the depositary will redeem, as of the same redemption date, the
number of depositary shares representing shares of the preferred stock so
redeemed, provided ITC/\DeltaCom shall have paid in full to the depositary the
redemption price of the preferred stock to be redeemed plus an amount equal to
any accrued and unpaid dividends thereon to the date fixed for redemption. The
redemption price per depositary share will be equal to the corresponding
proportion of the redemption price and any other amounts per share payable with
respect to the preferred stock. If fewer than all the depositary shares are to
be redeemed, the depositary shares to be redeemed will be selected pro rata, as
nearly as may be practicable without creating fractional depositary shares, or
by any other equitable method determined by ITC/\DeltaCom.
 
   From and after the date fixed for redemption, all dividends in respect of
the shares of preferred stock so called for redemption will cease to accrue,
the depositary shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the depositary receipts evidencing
the depositary shares so called for redemption will cease, except the right to
receive any moneys payable upon the redemption and any money or other property
to which the holders of the depositary receipts were entitled the redemption
and surrender thereof to the depositary.
 
Voting of the Preferred Stock
 
   Upon receipt of notice of any meeting at which the holders of the preferred
stock are entitled to vote, the depositary will mail the information contained
in the notice of meeting to the record holders of the depositary receipts
evidencing the depositary shares which represent the preferred stock. Each
record holder of depositary receipts evidencing depositary shares on the record
date, which will be the same date as the record date for the preferred stock,
will be entitled to instruct the depositary as to the exercise of the voting
rights pertaining to the amount of preferred stock represented by the holder's
depositary shares. The depositary will vote the amount of preferred stock
represented by the depositary shares in accordance with the instructions, and
ITC/\DeltaCom will agree to take all reasonable action which may be deemed
necessary by the depositary in order to enable the depositary to do so. The
depositary will abstain from voting the amount of preferred stock represented
by the depositary shares to the extent it does not receive specific
instructions from the holders of depositary receipts evidencing the depositary
shares. The depositary shall not be responsible for any failure to carry out
any instruction to vote, or for the manner or effect of any such vote made, as
long as such action or non-action is in good faith and does not result from
negligence or willful misconduct of the depositary.
 
Liquidation Preference
 
   In the event of the liquidation, dissolution or winding up of ITC/\DeltaCom,
whether voluntary or involuntary, the holders of each depositary receipt will
be entitled to the fraction of the liquidation preference accorded each share
of preferred stock represented by the depositary shares evidenced by such
depositary receipt, as set forth in the applicable prospectus supplement.
 
Conversion of Preferred Stock
 
   The depositary shares, as such, are not convertible into common stock or any
other securities or property of ITC/\DeltaCom. Nevertheless, if so specified in
the applicable prospectus supplement relating to an offering of depositary
shares, the depositary receipts may be surrendered by their holders to the
depositary with written instructions to the depositary to instruct ITC/\DeltaCom
to cause conversion of the preferred stock represented by the depositary shares
evidenced by the depositary receipts into whole shares of common stock, other
shares of preferred stock of ITC/\DeltaCom or other shares of stock, and
ITC/\DeltaCom has agreed that upon receipt of those instructions and any amounts
payable in respect thereof, it will cause the conversion thereof utilizing the
same procedures as those provided for delivery of preferred stock to effect
such conversion. If the depositary shares evidenced by a depositary receipt are
to be converted in part only, a new depositary receipt or receipts will be
issued for any depositary shares not to be converted. No fractional shares of
common stock will
 
                                       28
<PAGE>
 
 
be issued upon conversion, and if such conversion would result in a fractional
share being issued, an amount will be paid in cash by ITC/\DeltaCom equal to the
value of the fractional interest based upon the closing price of the common
stock on the last business day prior to the conversion.
 
Amendment and Termination of the Deposit Agreement
 
   The form of depositary receipt evidencing the depositary shares which
represent the preferred stock and any provision of the deposit agreement may at
any time be amended by agreement between ITC/\DeltaCom and the depositary.
However, any amendment that materially and adversely alters the rights of the
holders of depositary receipts or that would be materially and adversely
inconsistent with the rights granted to the holders of the related preferred
stock will not be effective unless such amendment has been approved by the
existing holders of at least 66% of the depositary shares evidenced by the
depositary receipts then outstanding. No amendment shall impair the right,
subject to certain exceptions in the deposit agreement, of any holder of
depositary receipts to surrender any depositary receipt with instructions to
deliver to the holder the related preferred stock and all money and other
property, if any, represented thereby, except in order to comply with law.
Every holder of an outstanding depositary receipt at the time any such
amendment becomes effective shall be deemed, by continuing to hold such
receipt, to consent and agree to such amendment and to be bound by the deposit
agreement as amended thereby.
 
   The deposit agreement may be terminated by ITC/\DeltaCom upon not less than
30 days prior written notice to the depositary if a majority of each series of
preferred stock affected by such termination consents to such termination,
whereupon the depositary shall deliver or make available to each holder of
depositary receipts, upon surrender of the depositary receipts held by such
holder, such number of whole or fractional shares of preferred stock as are
represented by the depositary shares evidenced by such depositary receipts
together with any other property held by the depositary with respect to such
depositary receipt. In addition, the deposit agreement will automatically
terminate if:
 
  (1) all outstanding depositary shares shall have been redeemed;
 
  (2) there shall have been a final distribution in respect of the related
      preferred stock in connection with any liquidation, dissolution or
      winding up of ITC/\DeltaCom and such distribution shall have been
      distributed to the holders of depositary receipts evidencing the
      depositary shares representing such preferred stock; or
 
  (3) each share of the related preferred stock shall have been converted
      into securities of ITC/\DeltaCom not so represented by depositary
      shares.
 
Charges of Preferred Stock Depositary
 
   ITC/\DeltaCom will pay all transfer and other taxes and governmental charges
arising solely from the existence of the deposit agreement. In addition,
ITC/\DeltaCom will pay the fees and expenses of the depositary in connection
with the performance of its duties under the deposit agreement. However,
holders of depositary receipts will pay the fees and expenses of the depositary
for any duties requested by such holders to be performed which are outside of
those expressly provided for in the deposit agreement.
 
Resignation and Removal of Depositary
 
   The depositary may resign at any time by delivering to ITC/\DeltaCom notice
of its election to do so, and ITC/\DeltaCom may at any time remove the
depositary, any such resignation or removal to take effect upon the appointment
of a successor depositary. A successor depositary must be appointed within 60
days after delivery of the notice of resignation or removal and must be a bank
or trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
 
 
                                       29
<PAGE>
 
 
Miscellaneous
 
   The depositary will forward to holders of depositary receipts any reports
and communications from ITC/\DeltaCom which are received by the depositary with
respect to the related preferred stock.
 
   Neither the depositary nor ITC/\DeltaCom will be liable if it is prevented
from or delayed in, by law or any circumstances beyond its control, performing
its obligations under the deposit agreement. The obligations of ITC/\DeltaCom
and the depositary under the deposit agreement will be limited to performing
their duties thereunder in good faith and without negligence, in the case of
any action or inaction in the voting of preferred stock represented by the
depositary shares, gross negligence or willful misconduct, and ITC/\DeltaCom and
the depositary will not be obligated to prosecute or defend any legal
proceeding in respect of any depositary receipts, depositary shares or shares
of preferred stock represented thereby unless satisfactory indemnity is
furnished. ITC/\DeltaCom and the depositary may rely on written advice of
counsel or accountants, or information provided by persons presenting shares of
preferred stock represented thereby for deposit, holders of depositary receipts
or other persons believed in good faith to be competent to give such
information, and on documents believed in good faith to be genuine and signed
by a proper party.
 
   In the event the depositary shall receive conflicting claims, requests or
instructions from any holders of depositary receipts, on the one hand, and
ITC/\DeltaCom, on the other hand, the depositary shall be entitled to act on
such claims, requests or instructions received from ITC/\DeltaCom.
 
                                       30
<PAGE>

 
                            DESCRIPTION OF WARRANTS
 
General
 
   ITC/\DeltaCom may issue warrants to purchase its common stock, preferred
stock, or depositary shares. ITC/\DeltaCom may issue warrants independently or
together with any offered securities and may be attached to or separate from
those offered securities. ITC/\DeltaCom will issue the warrants under warrant
agreements to be entered into between ITC/\DeltaCom and a bank or trust company,
as warrant agent, all as shall be set forth in the applicable prospectus
supplement. The warrant agent will act solely as an agent of ITC/\DeltaCom in
connection with the warrants of the series being offered and will not assume
any obligation or relationship of agency or trust for or with any holders or
beneficial owners of warrants.
 
   The applicable prospectus supplement will describe the following terms,
where applicable, of warrants in respect of which this prospectus is being
delivered:
 
  (1) the title of the warrants;
 
  (2) the designation, amount and terms of the securities for which the
      warrants are exercisable;
 
  (3) the designation and terms of the other securities, if any, with which
      the warrants are to be issued and the number of warrants issued with
      each such security;
 
  (4) the price or prices at which the warrants will be issued;
 
  (5) the aggregate number of warrants;
 
  (6) any provisions for adjustment of the number or amount of securities
      receivable upon exercise of the warrants or the exercise price of the
      warrants;
 
  (7) the price or prices at which the securities purchasable upon exercise
      of the warrants may be purchased;
 
  (8) if applicable, the date on and after which the warrants and the
      securities purchasable upon exercise of the warrants will be separately
      transferable;
 
  (9) if applicable, a discussion of the material United States federal
      income tax considerations applicable to the exercise of the warrants;
 
  (10) any other terms of the warrants, including terms, procedures and
       limitations relating to the exchange and exercise of the warrants;
 
  (11) the date on which the right to exercise the warrants shall commence,
       and the date on which the right shall expire;
 
  (12) the maximum or minimum number of warrants which may be exercised at
       any time; and
 
  (13) information with respect to book-entry procedures, if any.
 
Exercise of Warrants
 
   Each warrant will entitle the holder of warrants to purchase for cash the
amount of shares of preferred stock, shares of common stock or depositary
shares at the exercise price as shall in each case be set forth in, or be
determinable as set forth in, the prospectus supplement relating to the
warrants offered thereby. Warrants may be exercised at any time up to the close
of business on the expiration date set forth in the prospectus supplement
relating to the warrants offered thereby. After the close of business on the
expiration date, unexercised warrants will become void.
 
   Warrants may be exercised as set forth in the prospectus supplement relating
to the warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the prospectus
supplement, ITC/\DeltaCom will, as soon as practicable, forward the shares of
preferred stock, shares of common stock or depositary shares purchasable upon
such exercise. If less than all of the warrants represented by the warrant
certificate are exercised, a new warrant certificate will be issued for the
remaining warrants.
 
                                       31
<PAGE>

 
      DESCRIPTION OF STOCK PURCHASE CONTRACTS TO PURCHASE COMMON STOCK OR
                    PREFERRED STOCK AND STOCK PURCHASE UNITS
 
   Unless otherwise specified in the applicable prospectus supplement,
ITC/\DeltaCom may issue stock purchase contracts, including contracts obligating
holders to purchase from ITC/\DeltaCom, and ITC/\DeltaCom to sell to the 
holders, a specified number of shares of common stock or preferred stock at a
future date or dates. The consideration per share of common stock or preferred
stock may be fixed at the time the stock purchase contracts are issued or may be
determined by a specific reference to a formula set forth in the stock purchase
contracts. The stock purchase contracts may be issued separately or as part of
stock purchase units consisting of:
 
  (1) a stock purchase contract and
 
  (2) preferred securities or debt obligations of third parties, including
      U.S. Treasury securities, securing the holders' obligations to purchase
      the common stock or the preferred stock under the stock purchase
      contracts.
 
   The stock purchase contracts may require ITC/\DeltaCom to make periodic
payments to the holders of the stock purchase units or vice versa, and such
payments may be unsecured or prefunded on some basis. The stock purchase
contracts may require holders to secure their obligations thereunder in a
specified manner.
 
   The securities related to the stock purchase contracts will be pledged to a
collateral agent, for the benefit of ITC/\DeltaCom, pursuant to a pledge
agreement. The pledged securities will secure the obligations of holders of
stock purchase contracts to purchase common stock or preferred stock under the
related stock purchase contracts. The rights of holders of stock purchase
contracts to the related pledged securities will be subject to ITC/\DeltaCom's
security interest in those pledged securities. That security interest will be
created by the pledge agreement. No holder of stock purchase contracts will be
permitted to withdraw the pledged securities related to such stock purchase
contracts from the pledge arrangement except upon the termination or early
settlement of the related stock purchase contracts. Subject to that security
interest and the terms of the purchase contract agreement and the pledge
agreement, each holder of a stock purchase contract will retain full beneficial
ownership of the related pledged securities.
 
   Except as described in the applicable prospectus supplement, the collateral
agent will, upon receipt of distributions on the pledged securities, distribute
such payments to ITC/\DeltaCom or a purchase contract agent, as provided in the
pledge agreement. The purchase contract agent will in turn distribute payments
it receives as provided in the stock purchase contract. The applicable
prospectus supplement will describe the terms of any stock purchase contracts
or stock purchase units. The description in the prospectus supplement will not
necessarily be complete and will be qualified in its entirety by reference to
the stock purchase contracts, and, if applicable, collateral arrangements and
depositary arrangements, relating to such stock purchase contracts or stock
purchase units.
 
                                       32
<PAGE>

 
                       DESCRIPTION OF SUBSCRIPTION RIGHTS
 
General
 
   ITC/\DeltaCom may issue subscription rights to purchase common stock,
preferred stock, depositary shares or warrants to purchase preferred stock or
common stock. ITC/\DeltaCom may issue subscription rights independently or
together with any other offered security and which may or may not be
transferable by the purchaser receiving the subscription rights. In connection
with any subscription rights offering to ITC/\DeltaCom's stockholders,
ITC/\DeltaCom may enter into a standby underwriting arrangement with one or more
underwriters pursuant to which the underwriter(s) will purchase any offered
securities remaining unsubscribed for after the subscription rights offering.
In connection with a subscription rights offering to ITC/\DeltaCom's
stockholders, certificates evidencing the subscription rights and a prospectus
supplement will be distributed to ITC/\DeltaCom's stockholders on the record
date for receiving subscription rights in the subscription rights offering set
by ITC/\DeltaCom.
 
   The applicable prospectus supplement will describe the following terms of
subscription rights in respect of which this prospectus is being delivered:
 
  (1) the title of the subscription rights;
 
  (2) the securities for which the subscription rights are exercisable;
 
  (3) the exercise price for the subscription rights;
 
  (4) the number of subscription rights issued to each stockholder;
 
  (5) the extent to which the subscription rights are transferable;
 
  (6) if applicable, a discussion of the material United States federal
      income tax considerations applicable to the issuance or exercise of the
      subscription rights;
 
  (7) any other terms of the subscription rights, including terms, procedures
      and limitations relating to the exchange and exercise of the 
      subscription rights;
 
  (8) the date on which the right to exercise the subscription rights shall
      commence, and the date on which the right shall expire;
 
  (9) the extent to which the subscription rights offering includes an over-
      subscription privilege with respect to unsubscribed securities; and
 
  (10) if applicable, the material terms of any standby underwriting
       arrangement entered into by ITC/\DeltaCom in connection with the
       subscription rights offering.
 
Exercise of Subscription Rights
 
   Each subscription right will entitle the holder of subscription rights to
purchase for cash the number of shares of preferred stock, depositary shares,
common stock, warrants or any combination thereof, at the exercise price as
shall in each case be set forth in, or be determinable as set forth in, the
prospectus supplement relating to the subscription rights offered thereby.
Subscription rights may be exercised at any time up to the close of business on
the expiration date for such subscription rights set forth in the prospectus
supplement. After the close of business on the expiration date, all unexercised
subscription rights will become void.
 
   Subscription rights may be exercised as set forth in the prospectus
supplement relating to the subscription rights offered thereby. Upon receipt of
payment and the subscription rights certificate properly completed and duly
executed at the corporate trust office of the subscription rights agent or any
other office indicated in the prospectus supplement, ITC/\DeltaCom will, as soon
as practicable, forward the shares of preferred stock or common stock,
depositary shares or warrants purchasable upon such exercise. In the event that
not all of the subscription rights issued in any offering are exercised,
ITC/\DeltaCom may determine to offer any unsubscribed offered securities
directly to persons other than stockholders, to or through agents, underwriters
or dealers or through a combination of such methods, including pursuant to
standby underwriting arrangements, as set forth in the applicable prospectus
supplement.
 
                                       33
<PAGE>

 
                              PLAN OF DISTRIBUTION
 
   ITC/\DeltaCom may sell the offered securities:
 
  .  directly to purchasers;
 
  .  through agents;
 
  .  through dealers;
 
  .  through underwriters;
 
  .  directly to its stockholders; or
 
  .  through a combination of any of these methods of sale.
 
   In addition, ITC/\DeltaCom may issue the offered securities as a dividend or
distribution.
 
   We may effect the distribution of the offered securities from time to time
in one or more transactions either:
 
  .  at a fixed price or prices, which may be changed;
 
  .  at market prices prevailing at the time of sale;
 
  .  at prices related to such prevailing market prices; or
 
  .  at negotiated prices.
 
   ITC/\DeltaCom may directly solicit offers to purchase offered securities.
Agents designated by ITC/\DeltaCom from time to time may also solicit offers to
purchase offered securities. Any agent designated by ITC/\DeltaCom, who may be
deemed to be an "underwriter" as that term is defined in the Securities Act,
involved in the offer or sale of the offered securities in respect of which
this prospectus is delivered will be named, and any commissions payable by
ITC/\DeltaCom to such agent will be set forth in the prospectus supplement.
 
   If a dealer is utilized in the sale of the offered securities in respect of
which this prospectus is delivered, ITC/\DeltaCom will sell such offered
securities to the dealer, as principal. The dealer, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, may then resell
such offered securities to the public at varying prices to be determined by
such dealer at the time of resale.
 
   If an underwriter is, or underwriters are, utilized in the sale,
ITC/\DeltaCom will execute an underwriting agreement with such underwriters at
the time of sale to them and the names of the underwriters will be set forth in
the prospectus supplement, which will be used by the underwriter to make
resales of the offered securities in respect of which this prospectus is
delivered to the public. In connection with the sale of offered securities,
such underwriter may be deemed to have received compensation from ITC/\DeltaCom
in the form of underwriting discounts or commissions and may also receive
commissions from purchasers of offered securities for whom they may act as
agents. Underwriters may also sell offered securities to or through dealers,
and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Any underwriting compensation paid by ITC/\DeltaCom
to underwriters in connection with the offering of offered securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the applicable prospectus supplement.
 
   Pursuant to any standby underwriting agreement entered into in connection
with a subscription rights offering to ITC/\DeltaCom's stockholders, persons
acting as standby underwriters may receive a commitment fee for all securities
underlying the subscription rights that the underwriter commits to purchase on
a standby basis. Additionally, prior to the expiration date with respect to any
subscription rights, any standby underwriters in a subscription rights offering
to ITC/\DeltaCom's stockholders may offer such securities on a when-issued
basis, including securities to be acquired through the purchase and exercise of
subscription rights, at prices set
 
                                       34
<PAGE>

 
from time to time by the standby underwriters. After the expiration date with
respect to such subscription rights, the underwriters may offer securities of
the type underlying the subscription rights, whether acquired pursuant to a
standby underwriting agreement, the exercise of the subscription rights or the
purchase of such securities in the market, to the public at a price or prices
to be determined by the underwriters. The standby underwriters may thus realize
profits or losses independent of the underwriting discounts or commissions paid
by ITC/\DeltaCom. If ITC/\DeltaCom does not enter into a standby underwriting
arrangement in connection with a subscription rights offering to ITC/\DeltaCom's
stockholders, ITC/\DeltaCom may elect to retain a dealer-manager to manage such
a subscription rights offering for ITC/\DeltaCom. Any such dealer-manager may
offer securities of the type underlying the subscription rights acquired or to
be acquired pursuant to the purchase and exercise of subscription rights and
may thus realize profits or losses independent of any dealer-manager fee paid
by ITC/\DeltaCom.
 
   Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with ITC/\DeltaCom, to indemnification by
ITC/\DeltaCom against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which they may be
required to make in respect thereof. Underwriters and agents may engage in
transactions with, or perform services for, ITC/\DeltaCom in the ordinary course
of business.
 
   If so indicated in the applicable prospectus supplement, ITC/\DeltaCom will
authorize underwriters, dealers or other persons to solicit offers by certain
institutions to purchase offered securities pursuant to contracts providing for
payment and delivery on a future date or dates. Institutions with which such
contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others. The obligations of any purchasers under any such
contract will not be subject to any conditions except that:
 
  .  the purchase of the offered securities shall not at the time of delivery
     be prohibited under the laws of the jurisdiction to which such purchaser
     is subject; and
 
  .  if the offered securities are also being sold to underwriters,
     ITC/\DeltaCom shall have sold to such underwriters the offered securities
     not sold for delayed delivery.
 
   The underwriters, dealers and such other persons will not have any
responsibility in respect of the validity or performance of such contracts. The
prospectus supplement relating to such contracts will set forth the price to be
paid for offered securities pursuant to such contracts, the commission payable
for solicitation of such contracts and the date or dates in the future for
delivery of offered securities pursuant to such contracts.
 
   Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. The underwriters may over-
allot shares of the offered securities in connection with an offering of
offered securities, thereby creating a short position in the underwriters'
account. Syndicate covering transactions involve purchases of the offered
securities in the open market after the distribution has been completed in
order to cover syndicate short positions. Stabilizing and syndicate covering
transactions may cause the price of the offered securities to be higher than it
would otherwise be in the absence of such transactions. These transactions, if
commenced, may be discontinued at any time.
 
   The anticipated date of delivery of offered securities will be set forth in
the applicable prospectus supplement relating to each offer.
 
                                       35
<PAGE>
 
 
                                 LEGAL MATTERS
 
   The validity of the offered securities will be passed upon for ITC/\DeltaCom
by Hogan & Hartson L.L.P., Washington, D.C., special counsel for ITC/\DeltaCom.
Hogan & Hartson L.L.P. also provides legal services to affiliated companies of
ITC/\DeltaCom and Campbell B. Lanier, III. Anthony S. Harrington, a partner of
the firm, beneficially owns 159,744 shares of Common Stock of ITC/\DeltaCom. If
the offered securities are distributed in an underwritten offering or through
agents, certain legal matters may be passed upon for any agents or underwriters
by counsel for such agents or underwriters identified in the applicable
prospectus supplement.
 
                                    EXPERTS
 
   The consolidated balance sheets of ITC/\DeltaCom, Inc. and subsidiaries as
of December 31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1998 and the related schedule incorporated by
reference in this Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
 
                                       36
<PAGE>
 
                                  $300,000,000
 
 
                                ITC/\DeltaCom LOGO
 
 
                         Common Stock, Preferred Stock,
                          Depositary Shares, Warrants,
                      Subscription Rights, Stock Purchase
                       Contracts to Purchase Common Stock
                          or Preferred Stock and Stock
                                 Purchase Units
 
 
 
 
 
                                   Prospectus

                             Dated April 13, 1999 


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