INTERMEDIA COMMUNICATIONS INC
S-3/A, 1998-02-13
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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<PAGE>
 
     
   As filed with the Securities and Exchange Commission on February 12, 1998
     
                                               Registration No. 333-45019     
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             _____________________
                                         
                                AMENDMENT NO.1      
                                  TO FORM S-3
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
                             _____________________

                         INTERMEDIA COMMUNICATIONS INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                             _____________________

            DELAWARE                                             59-29-13586
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                             3625 QUEEN PALM DRIVE
                              TAMPA, FLORIDA 33619
                                 (813) 829-0011
         (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
            AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                             _____________________

                    DAVID C. RUBERG, CHAIRMAN OF THE BOARD,
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                         INTERMEDIA COMMUNICATIONS INC.
                             3625 QUEEN PALM DRIVE
                              TAMPA, FLORIDA 33619
                                 (813) 829-0011
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)
                             _____________________

                                    COPY TO:

                            RALPH J. SUTCLIFFE, ESQ.
                      KRONISH, LIEB, WEINER & HELLMAN LLP
                          1114 AVENUE OF THE AMERICAS
                         NEW YORK, NEW YORK 10036-7798
                              _____________________

     Approximate date of commencement of proposed sale to public:  From time to
time after the effective date of this Registration Statement.

     If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.  [_]

     If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.  [X]

     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.  [_]
<PAGE>
 
     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  [_]

     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.  [_]

                                       2
<PAGE>
 
                             _____________________

                        CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
 Title at each class of securities       Amount to be        Proposed maximum        Proposed maximum aggregate       Amount of
 to be registered                       registered  (1)   offering price per unit        offering price (1)        registration fee
 
- ------------------------------------------------------------------------------------------------------------------------------------

<S>                                     <C>              <C>                        <C>                            <C>
Debt Securities (2)
Preferred Stock, par value $1.00 per
 share (3)
Depositary Shares (4)                     $500,000,000                         (1)                   $500,000,000           $147,500

Common Stock, par value $.01 per
 share (5)
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1)  Estimated solely for the purposes of calculating the registration fee
     pursuant to Rule 457(0) under the Securities Act of 1933, as amended.  The
     aggregate public offering price of the Debt Securities, Preferred Stock and
     Common Stock registered hereby will not exceed $500,000,000.  No separate
     consideration will be received for Common Stock, Preferred Stock or Debt
     Securities that are issued upon conversion or exchange of Preferred Stock
     or Debt Securities.
(2)  Such indeterminate amount of Debt Securities as may from time to time be
     issued at indeterminate prices or issuable upon conversion or exchange of
     Debt Securities or Preferred Stock to the extent such Debt Securities or
     Preferred Stock are, by their terms, convertible into or exchangeable for
     Debt Securities.
(3)  Such indeterminate number of shares of Preferred Stock as may from time to
     time be issued at indeterminate prices or issuable upon conversion or
     exchange of Debt Securities or Preferred Stock to the extent such Debt
     Securities or Preferred Stock are, by their terms, convertible into or
     exchangeable for shares of Preferred Stock.
(4)  Such indeterminate number of Depositary Shares as may be issued in the
     event that the registrant elects to offer fractional interests in shares of
     Preferred Stock registered hereby.
(5)  Such indeterminate number of shares of Common Stock as may from time to
     time be  issued at indeterminate prices or issuable upon conversion or
     exchange of Debt Securities or Preferred Stock to the extent such Debt
     Securities or Preferred Stock are, by their terms, convertible into or
     exchangeable for shares of Common Stock.


                             _____________________


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

                                       3
<PAGE>
 
          

PROSPECTUS
                         INTERMEDIA COMMUNICATIONS INC.

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

                                  $500,000,000

DEBT SECURITIES        PREFERRED STOCK        DEPOSITARY SHARES     COMMON STOCK

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

               Intermedia Communications Inc., a Delaware corporation
     ("Intermedia" or the "Company"), may issue from time to time, together or
     separately, (i) debt securities (the "Debt Securities"), which may be
     senior (the "Senior Debt Securities") or subordinated ("Subordinated Debt
     Securities"), secured or unsecured, and which may be convertible into or
     exchangeable for shares of common stock, par value $.01 per share, of the
     Company (the "Common Stock"), shares of preferred stock, par value $1.00
     per share (the "Preferred Stock"), or other debt securities; (2) Preferred
     Stock, which may be convertible into or exchangeable for shares of Common
     Stock, shares of Preferred Stock or Debt Securities; (3) depositary shares
     ("Depositary Shares") in the event that the Company elects to offer
     fractional interests in shares of Preferred Stock, which may be convertible
     into or exchangeable for shares of Preferred Stock or Common Stock; and (4)
     Common Stock, each in amounts and at prices and on terms to be determined
     by market conditions at the time of offering thereof.  The Debt Securities,
     Preferred Stock, Depositary Shares and Common Stock are collectively
     referred to herein as the "Securities."
    
               The Securities may be issued in one or more series or issuances
     and will be limited to $500,000,000 in aggregate public offering price. Of
     the Securities being registered, a portion of the shares of Common Stock of
     Intermedia may be offered and sold by Intermedia Capital Inc. 
     ("Intermedia Capital"), a wholly owned subsidiary of Intermedia. Intermedia
     Capital may be deemed to be an "underwriter" and any profits on the sale of
     Common Stock by it might be deemed to be underwriting discounts and
     commissions under the Securities Act of 1933, as amended (the "Securities
     Act"). To the extent Intermedia Capital may be deemed to be an underwriter,
     Intermedia Capital may be subject to certain statutory liabilities
     of the Securities Act, including, but not limited to, Sections 11, 12 and
     17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act
     of 1934, as amended (the "Exchange Act"). See "Plan of Distribution." The
     specific terms of the Securities in respect of which this Prospectus is
     being delivered are set forth in the accompanying prospectus supplement
     (the "Prospectus Supplement"), including, where applicable, (1) in the case
     of Debt Securities, the specific designation, aggregate principal amount,
     authorized denomination, initial offering price, maturity, premium (if
     any), interest rate (which may be fixed or floating), time of and method of
     calculating the payment of interest, if any, any redemption or sinking fund
     terms, any terms for the conversion into or exchange for shares of Common
     Stock or Preferred Stock or other Debt Securities, terms of subordination
     of Subordinated Debt Securities, and other specific terms; (2) in the case
     of Preferred Stock, the specific designation, any dividend, liquidation,
     redemption, sinking fund, voting or other rights, time of payment of
     dividends, any terms for the conversion into or exchange for shares of
     Common Stock or shares of Preferred Stock or Debt Securities, the initial
     offering price and other specific terms; (3) in the case of Depositary
     Shares, the specific designation, any dividend, liquidation preference,
     redemption, sinking fund, voting or other rights, time of payment of
     dividends, any terms for the conversion into or exchange for shares of
     Common Stock or shares of Preferred Stock or Debt Securities, the initial
     offering price and other specific terms; and (4) in the case of Common
     Stock, the offering price. The Prospectus Supplement will also contain
     information, where applicable, about certain United States federal income
     tax considerations relating to, and any listing on a securities exchange
     of, the Securities covered by the Prospectus Supplement.     

            PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY MATTERS
             DISCUSSED UNDER THE CAPTION "RISK FACTORS" ON PAGE 5.
                             _____________________

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

                             _____________________

               NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
     GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE
     CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
     REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
     COMPANY.   NEITHER THE


<PAGE>
 
     DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
     CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
     AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
 
               THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
     SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN
     ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
     IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO
     DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
     SOLICITATION.
    
            THE DATE OF THIS PROSPECTUS IS FEBRUARY 13, 1998.     

                                       2
<PAGE>
 
                             AVAILABLE INFORMATION
    
               The Company is subject to the informational requirements of the
     Exchange Act, and in accordance therewith, files reports, proxy statements
     and other information with the Securities and Exchange Commission (the
     "Commission"). Such reports, proxy and information statements and other
     information can be inspected and copied at the public reference facilities
     maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
     20549, its Midwest Regional Office, 500 West Madison Street, Suite 1400,
     Chicago, Illinois 60661-2511 and at its Northeast Regional Office, 7 World
     Trade Center, Suite 1300, New York, New York 10048. Copies of such material
     can be obtained from the Public Reference Section of the Commission at 450
     Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
     material can also be inspected at the Web site of the Commission located at
     http://www.sec.gov. The Common Stock is listed on the Nasdaq National
     Market under the symbol "ICIX". Reports, proxy and information statements,
     and other information concerning the Company can also be inspected at the
     Nasdaq National Market at 1735 17 Street, N.W., Washington, D.C. 20006-
     1506.     

               Statements contained in this Prospectus as to the contents of any
     contract or other document are not necessarily complete, and reference is
     made to the copy of such contract or other document filed as an exhibit to
     the Registration Statement of which this Prospectus forms a part, each such
     statement being qualified in all respects by such reference.

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

               The following documents or information have been filed by the
     Company with the Commission and are incorporated herein by reference:
    
          The Company's Annual Report on Form 10-K for the year ended December
          31, 1996.
          The Company's Annual Report on Form 10-K/A for the year ended December
          31, 1996 filed with the Commission on May 15, 1997.
          The portions of the Proxy Statement for the Annual Meeting of
          Stockholders of the Company held on May 22, 1997 that have been
          incorporated by reference into the Company's Annual Report on Form
          10-K for the year ended December 31, 1996.
          The Company's Current Report on Form 8-K filed with the Commission on
          February 24, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          March 14, 1997.
          The Company's Quarterly Report on Form 10-Q for the quarter ended
          March 31, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          June 5, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          July 9, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          July 17, 1997.
          The Company's Current Report on Form 8-K/A filed with the Commission
          on August 4, 1997.
          The Company's Quarterly Report on Form 10-Q for the quarter ended June
          30, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          October 27, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          November 6, 1997.
          The Company's Quarterly Report on Form 10-Q for the quarter ended
          September 30, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          November 25, 1997.
          The Company's Current Report on Form 8-K/A filed with the Commission
          on December 4, 1997.
          The Company's Current Report on Form 8-K/A filed with the Commission
          on December 16, 1997.   The Company's Current Report on Form 8-K filed
          with the Commission on December 18, 1997.   The Company's Current
          Report on Form 8-K/A filed with the Commission on December 22, 1997.
          The Company's Current Report on Form 8-K filed with the Commission on
          January 21, 1998.
          The Company's Current Report on Form 8-K filed with the Commission
          on February 12, 1998. 
          The description of the capital stock contained in the Company's
          registration statements on Form 8-A under the Exchange Act, filed
          April 7, 1992, April 28, 1992 and April 30, 1992 (File No. 0-20135).
                                                                                
          In addition, the following information that has been filed with the
     Commission is incorporated herein by reference:

          The consolidated financial statements of DIGEX, Incorporated ("DIGEX")
     appearing in DIGEX's   Annual Report on Form 10-SKB for the year ended
     December 31, 1996.

                                       3
<PAGE>
 
          The audited financial statements of Shared Technologies Fairchild Inc.
     ("Shared Technologies")   appearing in Shared Technologies' Annual Report
     on Form 10-K for the year ended December 31, 1996.

          All documents subsequently filed by the Company with the Commission
     pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
     date of this Prospectus and prior to the termination of the offering
     covered by this Prospectus will be deemed incorporated by reference into
     this Prospectus and to be a part hereof from the date of filing of such
     documents.  Any statement contained in a document incorporated by reference
     herein shall be deemed to be modified or superseded for purposes of this
     Prospectus to the extent that a statement contained herein modifies or
     supersedes such statement.  Any statement so modified or superseded shall
     not be deemed, except as so modified or superseded, to constitute a part of
     this Prospectus.

               THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH
     PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE
     WRITTEN OR ORAL REQUEST OF SUCH PERSON TO INTERMEDIA COMMUNICATIONS INC.,
     3625 QUEEN PALM DRIVE, TAMPA, FLORIDA 33619 (TELEPHONE 813-829-0011),
     ATTENTION: INVESTOR RELATIONS, A COPY OF ANY OR ALL OF THE DOCUMENTS
     REFERRED TO ABOVE (OTHER THAN EXHIBITS TO SUCH DOCUMENTS) WHICH HAVE BEEN
     INCORPORATED BY REFERENCE IN THIS PROSPECTUS.

                                       4
<PAGE>
 
                                  RISK FACTORS

               Prospective investors should consider carefully the following
     factors relating to the business of the Company and this offering, in
     addition to other information set forth elsewhere in this Prospectus,
     before purchasing the Securities offered hereby.

               Limited Operations of Certain Services; History of Net Losses.
     The Company's business commenced in 1987. Substantially all of the
     Company's revenues are derived from local exchange services, enhanced data
     services, long distance services, integration services and certain local
     network services. Many of these services have only recently been initiated
     or their availability only recently expanded in new market areas. The
     Company is expecting to substantially increase the size of its operations
     in the near future. Prospective investors, therefore, have limited
     historical financial information about the Company upon which to base an
     evaluation of the Company's performance. Given the Company's limited
     operating history, there is no assurance that it will be able to compete
     successfully in the telecommunications business.

               The development of the Company's business and the expansion of
     its networks requires significant capital, operational and administrative
     expenditures, a substantial portion of which are incurred before the
     realization of revenues. These capital expenditures will result in negative
     cash flow until an adequate customer base is established. Although its
     revenues have increased in each of the last three years, Intermedia has
     incurred significant increases in expenses associated with the installation
     of local/long distance voice switches and expansion of its fiber optic
     networks, services and customer base. Intermedia reported net losses of
     approximately $3.1 million, $20.7 million, $57.2 million for the years
     ended December 31, 1994, 1995 and 1996 and a net loss of $201.2 million for
     the nine months ended September 30, 1997, respectively. The Company
     anticipates recording a significant net loss in 1997 that is expected to be
     substantially greater than the loss in 1996 and expects net losses to
     continue for the next several years. In addition, the Company expects to
     have negative EBITDA in 1997. There can be no assurance that Intermedia
     will achieve or sustain profitability or positive EBITDA in the future.

               Substantial Indebtedness; Insufficiency of Earnings to Cover
     Fixed Charges. The Company is highly leveraged. At September 30, 1997,
     after giving pro forma effect to the pending acquisition of 100% of the
     outstanding equity of Shared Technologies (the "Shared Technologies
     Acquisition"), the offering (the "October 30 Offerings") of the Company's
     7% Junior Convertible Series E Preferred Stock (the "Series E Preferred
     Stock") and the Company's 8 7/8% Senior Notes due 2007 (the "8 7/8%
     Notes"), and the offering (the "December 23 Offering") of the Company's 8
     1/2% Senior Notes due 2008 (the "8 1/2% Notes)  and the application of the
     net proceeds therefrom, the Company would have had outstanding
     approximately $1.4 billion in aggregate principal amount of indebtedness
     and other liabilities on a consolidated basis (including trade payables),
     approximately $312.0 million of obligations with respect to dividend
     payments and the mandatory redemption of the 13 1/2% Series B Redeemable
     Exchangeable Preferred Stock due 2009 (the "Series B Preferred Stock"), and
     $170.1 and $193.7 million of obligations with respect to the Company's 7%
     Junior Convertible Series D Preferred Stock (the "Series D Preferred
     Stock") and the Series E Preferred Stock, respectively. The degree to which
     the Company is leveraged could have important consequences to holders of
     the Securities, including the following: (i) a substantial portion of the
     Company's cash flow from operations will be dedicated to payment of the
     principal and interest on its indebtedness, to payment of dividends on and
     the redemption of the Series B Preferred Stock and the payment of dividends
     on the Series D Preferred Stock and the Series E Preferred Stock, thereby
     reducing funds available for other purposes; (ii) the Company's significant
     degree of leverage could increase its vulnerability to changes in general
     economic conditions or increases in prevailing interest rates; (iii) the
     Company's ability to obtain additional financing for working capital,
     capital expenditures, acquisitions, general corporate purposes or other
     purposes could be impaired; and (iv) the Company may be more leveraged than
     certain of its competitors, which may be a competitive disadvantage.

                                       5
<PAGE>
 
          
               The Company's historical earnings have been insufficient to cover
     combined fixed charges and dividends on preferred stock by $0.6 million,
     $2.3 million, $3.3 million, $19.8 million and $60.0 million for each of the
     years ended December 31, 1992, 1993, 1994, 1995 and 1996, respectively.
     Combined fixed charges and dividends include interest and dividends whether
     paid or accrued. In addition, insufficiencies of $37.6 million and $187.0
     million were experienced in the nine-month periods ended September 30, 1996
     and 1997, respectively. On a pro forma basis, after giving applicable
     effect to the DIGEX, EMI Communications, Inc. ("EMI"), Universal Telecom
     Inc. ("UTT") and Net Solve Incorporated ("NetSolve") acquisitions, the
     pending acquisition of Shared Technologies, the March 1997 sale of $300
     million of preferred stock (the "March 1997 Offerings"), the concurrent
     offerings (the "July 9 Offerings") of the Series D Preferred Stock and the
     Company's 11 1/4% Senior Discount Notes due 2007 (the 11 1/4% Notes), the
     October 30 Offerings and the December 23 Offering, the Company's earnings
     were insufficient to cover combined fixed charges and dividends on
     preferred stock by $274.0 million for the year ended December 31, 1996 and
     by $321.1 million for the nine months ended September 30, 1997. The Company
     anticipates that earnings will be insufficient to cover fixed charges for
     the next several years. In order for the Company to meet its debt service
     obligations, its dividend and redemption obligations with respect to the
     Series B Preferred Stock and its dividend obligations with respect to the
     Series D Preferred Stock and Series E Preferred Stock the Company will need
     to substantially improve its operating results. There can be no assurance
     that the Company's operating results will be of sufficient magnitude to
     enable the Company to meet such debt service, dividend and redemption
     obligations. In the absence of such operating results, the Company could
     face substantial liquidity problems and might be required to raise
     additional financing through the issuance of debt or equity securities;
     however, there can be no assurance that Intermedia would be successful in
     raising such financing, or the terms or timing thereof.     

               Effect of Substantial Additional Indebtedness on the Company's
     Ability to Make Payments on the Securities. The indenture governing the 12
     1/2% Notes (the "12 1/2% Notes Indenture"), the indenture governing the 11
     1/4% Notes (the "11 1/4% Notes Indenture"), the indenture governing the 8
     7/8% Notes (the "8 7/8% Notes Indenture") and the indenture governing the
     Company's 8 1/2% Notes (the "8 1/2% Notes Indenture"; the 12 1/2% Notes
     Indenture,  11 1/4% Notes Indenture, 8 7/8% Notes Indenture and 8 1/2%
     Notes Indenture collectively referred to as the "Existing Indentures") and
     the Certificate of Designation governing the Series B Preferred Stock (the
     "Series B Certificate of Designation")) limit, but do not prohibit, the
     incurrence of additional indebtedness by the Company and its subsidiaries,
     and the Company may incur substantial additional indebtedness during the
     next few years to finance the construction of networks and purchase of
     network electronics, including local/long distance voice and data switches.
     In addition, the Company may establish a bank credit facility which may be
     secured by a substantial portion of the assets of the Company.  All
     additional indebtedness of the Company, including any indebtedness under a
     bank credit facility may rank pari passu with or senior in right of payment
     to any payment obligations with respect to the Securities. The debt service
     requirements of any additional indebtedness would make it more difficult
     for the Company to pay cash dividends and principal and interest with
     respect to existing securities and indebtedness of the Company as well as
     any Securities.

               Risks Associated with Acquisitions.   The Company intends to use
     the net proceeds of the October 30 Offerings and the December 23 Offering,
     to expand its networks and service offerings through internal development
     and acquisitions. On November 20, 1997, Intermedia, Moonlight Acquisition
     Corp., a wholly-owned subsidiary of Intermedia, and Shared Technologies
     signed a definitive merger agreement pursuant to which holders of Shared
     Technologies' common stock would receive $15.00 per share in cash upon
     consummation of the merger. In connection with the pending acquisition of
     Shared Technologies and in anticipation of Shared Technologies becoming a
     "Restricted Subsidiary" within the meaning of the Company's Existing
     Indentures and the Series B Certificate of Designation, the Company
     purchased certain equity interests and certain notes issued by Shared
     Technologies.  If the pending acquisition of Shared Technologies is not
     consummated before May 11, 1998 and, as a result, Shared Technologies does
     not become a Restricted Subsidiary of the Company, an Event of Default may
     occur under the terms of each of the Existing Indentures and the Series B
     Certificate of Designation unless the Company disposes of its investment in
     Shared Technologies without a loss or holds its investment through an
     Unrestricted Subsidiary.  If such an event of default occurs, upon receipt
     of notice from

                                       6
<PAGE>
 
     the trustee under any of the Existing Indentures, or the holders of at
     least 25% of the outstanding principal amounts of the 12 1/2% Notes, the 11
     1/4% Notes, the 8 7/8% Notes or the 8 1/2% Notes, acceleration of the 12
     1/2% Notes, the 11 1/4% Notes, the 8 7/8% Notes or the 8 1/2% Notes,
     respectively, would result.  The occurrence of an Event of Default would
     not lead to the acceleration of the Series B Preferred Stock.  If all of
     the 12 1/2% Notes, 11 1/4% Notes, 8 7/8% Notes and 8 1/2% Notes were
     accelerated, the Company would not have sufficient funds available to repay
     the all of the 12 1/2% Notes, 11 1/4% Notes, 8 7/8% Notes and 8 1/2% Notes,
     unless it could arrange a refinancing of such notes.  The Company has used
     a portion of the net proceeds of the October 30 Offerings and December 23
     Offering to fund a pending acquisition of Shared Technologies.
    
               On December 17, 1997, the Company entered into a definitive
     agreement  for the acquisition of the Long Distance Savers group of
     companies ("LDS") for a purchase price of approximately $151.0 million, of
     which $120.0 million is payable in Intermedia common stock and $31.0
     million is payable in cash, in each case, subject to certain adjustments
     (the "LDS Acquisition"). On February 11, 1998, the Company entered into a
     definitive agreement and plan of merger for the acquisition of National
     Telecommunications of Florida, Inc. and its affiliate, NTC, Inc.
     (collectively, "National"), for a purchase price of approximately $151.0
     million, subject to certain adjustments, of which 70% is payable in
     Intermedia common stock and 30% is payable in cash. Such acquisitions, if
     made, could divert the Company's resources and management time and would
     require integration with the Company's existing networks and services.
     There can be no assurance that the pending acquisitions of Shared
     Technologies, LDS and National will be consummated or that any other
     acquisitions will occur or that any such acquisitions, including the
     acquisitions of Shared Technologies, LDS and National, if made, would be on
     terms favorable to the Company or would be successfully integrated into the
     Company's operations.    

               The Company is currently evaluating, has made offers with respect
     to, and is engaged in discussions regarding various other acquisition
     opportunities. These acquisitions could be funded by cash (including the
     proceeds of the October 30 Offerings and the December 23 Offering), a
     portion of the proceeds of the securities offered hereby (unless otherwise
     indicated in the applicable supplement prospectus) and/or the Company's
     securities. It is possible that one or more of such possible future
     acquisitions, if completed, could adversely affect the Company's funds from
     operations or cash available for distribution, in the short term or the
     long term or both, or increase the Company's debt, or such an acquisition
     could be followed by a decline in the market value of the Company's
     securities.

               Failure to Obtain Third Party Consents in connection with an
     Acquisition or Merger. The Company has consummated a number of acquistions
     over the past two years and expects to consummate additional acquisitions
     during the current fiscal year. In connection therewith, the Company may
     not have obtained, and in connection with future acquisitions may elect not
     to seek, all required consents from third parties with respect to acquired
     contracts. If an acquired contract required the consent of a third party
     and such consent was not obtained, the third party could assert a breach of
     the contract. The Company believes that the failure to obtain any such
     third party consents should not result in any material adverse consequences
     to the Company, although there can be no assurance that such a consequence
     will not result.
 
                   Class Action by DIGEX Stockholders. On June 5, 1997, the
     Company announced that it had agreed to acquire 100% of the outstanding
     equity of DIGEX (the "DIGEX Acquisition"). The acquisition was consummated
     through a tender offer for all of the outstanding shares of DIGEX, which
     closed on July 9, 1997, followed by a cash merger effective on July 11,
     1997 (the "Merger").

               On June 20, 1997, two purported class action complaints were
     filed in the Court of Chancery of the State of Delaware in and for New
     Castle County respectively by TAAM Associates, Inc. and David and Chaile
     Steinberg (the "Complaints"), purported stockholders of DIGEX, on behalf of
     all non-affiliated common stockholders of DIGEX, against Intermedia, DIGEX
     and the Directors of DIGEX (the "DIGEX Directors"). The Complaints allege
     that the DIGEX Directors violated their fiduciary duties to the public
     stockholders of DIGEX by agreeing to vote in favor of the Merger and that
     Intermedia knowingly aided and abetted such violation by offering to retain
     DIGEX management in their present positions and consenting to stock option
     grants to certain executive officers of DIGEX. The Complaints sought
     preliminary and permanent injunctions enjoining the Merger but no
     applications were made for such injunctions prior to the consummation of
     the Merger on July 11, 1997.  In addition, the Complaints seek cash damages
     from the DIGEX Directors.  In August 1997, a motion to dismiss the
     Complaints was filed on behalf of Intermedia, DIGEX and the DIGEX
     Directors.  The action has been dormant since that time.

               These cases are in their very early stages and no assurance can
     be given as to their ultimate outcome. Intermedia, after consultation with
     its counsel, believes that there are meritorious factual and legal defenses
     to the claims in the Complaints. Intermedia intends to defend vigorously
     the claims in the Complaints.

                                       7
<PAGE>
 
    
               Regulatory Approval of the October 30 Offerings and the December
     23 Offering. Certain states in which Intermedia is certificated provide for
     prior approval or notification of the issuance of securities by Intermedia.
     Because of time constraints, Intermedia did not seek the approval from such
     states prior to the October 30 Offerings and the December 23 Offering. The
     requirements for these filings may have been pre-empted by the National
     Securities Market Improvement Act of 1996, although there is no case law on
     this point. Intermedia subsequently filed the necessary notifications and
     applications for approval in these states. After consultation with counsel,
     Intermedia believes the regulatory approvals will be granted and that
     obtaining such approvals subsequent to the October 30 Offerings and the
     December 23 Offering should not result in any material adverse consequences
     to Intermedia, although there can be no assurance that such a consequence
     will not result.     

               Significant Capital Requirements and Need for Additional
     Financing. Expansion of the Company's existing networks and services and
     the development of new networks and services require significant capital
     expenditures. Intermedia expects to fund its capital requirements through
     existing resources, joint ventures, debt or equity financing (including
     capital raised through the October 30 Offerings and the December 23
     Offering), credit availability and internally generated funds.  The Company
     expects that continued expansion of its business will require raising
     substantial equity and/or debt by the end of fiscal 1999.  Depending on
     market conditions, the Company may determine to raise additional capital
     before such time.  There can be no assurance, however, that Intermedia will
     be successful in raising sufficient debt or equity on terms that it will
     consider acceptable. Moreover, the Existing Indentures, the Series B
     Certificate of Designation, the Certificate of Designation setting forth
     the rights of the Series D Preferred Stock (the "Series D Certificate of
     Designation") and the Certificate of Designation setting forth the rights
     of the Series E Preferred Stock (the "Series E Certificate of Designation")
     impose certain restrictions upon the Company's ability to incur additional
     indebtedness or issue additional preferred stock. In addition, the
     Company's future capital requirements will depend upon a number of factors,
     including marketing expenses, staffing levels and customer growth, as well
     as other factors that are not within the Company's control, such as
     competitive conditions, government regulation and capital costs. Failure to
     generate sufficient funds may require Intermedia to delay or abandon some
     of its future expansion or expenditures, which would have a material
     adverse effect on its growth and its ability to compete in the
     telecommunications industry.

               Expansion Risk. The Company is experiencing a period of rapid
     expansion which management expects will increase in the near future. This
     growth has increased the operating complexity of the Company as well as the
     level of responsibility for both existing and new management personnel. The
     Company's ability to manage its expansion effectively will require it to
     continue to implement and improve its operational and financial systems and
     to expand, train and manage its employee base. The Company's inability to
     effectively manage its expansion could have a material adverse effect on
     its business.

               A portion of the Company's expansion may occur through
     acquisitions as an alternative to direct investments in the assets required
     to implement the expansion. No assurance can be given that suitable
     acquisitions can be identified, financed and completed on acceptable terms,
     or that the Company's future acquisitions, if any, will be successful or
     will not impair the Company's ability to service its outstanding
     obligations.

               Maintenance of Peering Relationships. The Internet is comprised
     of many Internet service providers ("ISPs") who operate their own networks
     and interconnect with other ISPs at various peering points. The
     establishment and maintenance of peering relationships with other ISPs is
     necessary in order to exchange traffic with other ISPs without having to
     pay settlement charges. Although the Company meets the industry's current
     standards for peering, there is no assurance that other national ISPs will
     maintain peering relationships with the Company. In addition, there may
     develop increasing requirements associated with maintaining peering with
     the major national ISPs with which the Company may have to comply. There
     can be no assurance that the Company

                                       8
<PAGE>
 
     will be able to expand or adapt their network infrastructure to meet the
     industry's evolving standards on a timely basis, at a commercially
     reasonable cost, or at all.

               Potential Liability of On-Line Service Providers. The law in the
     United States relating to the liability of on-line service providers and
     ISPs for information carried on, disseminated through or hosted on their
     systems is currently unsettled. Several private lawsuits seeking to impose
     such liability are currently pending. In one case brought against an ISP,
     Religious Technology Center v. Netcom On-Line Communication Services, Inc.,
     the United States District Court for the Northern District of California
     ruled in a preliminary phase that under certain circumstances ISPs could be
     held liable for copyright infringement. The Telecommunications Act of 1996
     (the "1996 Act") prohibits and imposes criminal penalties for using an
     interactive computer service to transmit certain types of information and
     content, such as indecent or obscene communications. On June 26, 1997, the
     Supreme Court affirmed the decision of a panel of three federal judges
     which granted a preliminary injunction barring enforcement of this portion
     of the 1996 Act to the extent that enforcement is based upon allegations
     other than obscenity or child pornography as an impermissible restriction
     on the First Amendment's right of free speech. In addition, numerous states
     have adopted or are currently considering similar types of legislation. The
     imposition upon ISPs or Web hosting sites of potential liability for
     materials carried on or disseminated through their systems could require
     the Company to implement measures to reduce their exposure to such
     liability, which may require the expenditure of substantial resources or
     the discontinuation of certain product or service offerings. The Company
     believes that it is currently unsettled whether the 1996 Act prohibits and
     imposes liability for any services provided by the Company should the
     content or information transmitted be subject to the statute. The increased
     attention focused upon liability issues as a result of these lawsuits,
     legislation and legislative proposals could affect the growth of Internet
     use. Any such liability or asserted liability could have a material adverse
     effect on the Company's business, financial condition and results of
     operations.

               Dependence upon Network Infrastructure; Risk of System Failure,
     Security Risks.  The Company's success in marketing its services to
     business and government users requires that the Company provide superior
     reliability, capacity and security via its network infrastructure. The
     Company's networks are subject to physical damage, power loss, capacity
     limitations, software defects, breaches of security (by computer virus,
     break-ins or otherwise) and other factors, certain of which have caused,
     and will continue to cause, interruptions in service or reduced capacity
     for the Company's customers. Similarly, the Company's ISP business relies
     on the availability of its network infrastructure for the provision of
     Internet connectivity. Interruptions in service, capacity limitations or
     security breaches could have a material adverse effect on the Company's
     business, financial condition and results of operations.

               Risks of Implementation; Need to Obtain Permits and Rights of
     Way. The Company is continuing to expand its existing networks. The Company
     has identified other expansion opportunities in the eastern half of the
     United States and is currently extending the reach of its networks to
     pursue such opportunities. There can be no assurance that the Company will
     be able to expand its existing networks or construct or acquire new
     networks as currently planned on a timely basis. The expansion of the
     Company's existing networks and its construction or acquisition of new
     networks will be dependent, among other things, on its ability to acquire
     rights-of-way and any required permits on satisfactory terms and conditions
     and on its ability to finance such expansion, acquisition and construction.
     In addition, the Company may require pole attachment agreements with
     utilities and incumbent local exchange carriers ("ILECs") to operate
     existing and future networks, and there can be no assurance that such
     agreements will be obtained or obtainable on reasonable terms. These
     factors and others could adversely affect the expansion of the Company's
     customer base on its existing networks and commencement of operations on
     new networks. If the Company is not able to expand, acquire or construct
     its networks in accordance with its plans, the growth of its business would
     be materially adversely affected.

               Competition. In each of its markets, the Company faces
     significant competition for the local network services, including local
     exchange services, it offers from incumbent local exchange carriers
     ("ILECs"), which currently dominate their local telecommunications markets.
     ILECs have long-standing relationships with their

                                       9
<PAGE>
 
     customers which relationships may create competitive barriers. Furthermore,
     ILECs may have the potential to subsidize competitive service from monopoly
     service revenues. In addition, a continuing trend toward business
     combinations and alliances in the telecommunications industry may create
     significant new competitors to the Company. The Company also faces
     competition in most markets in which it operates from one or more
     integrated communications services providers ("ICPs") and ILECs operating
     fiber optic networks. In addition, the Company faces competition in its
     integration services business from equipment manufacturers, the regional
     Bell operating companies ("RBOCs") and other ILECs, long distance carriers
     and systems integrators, and in its enhanced data services business
     (including Internet) from local telephone companies, long distance
     carriers, very small aperture terminal ("VSAT") providers, other ISPs and
     others. In particular, the market for Internet services is extremely
     competitive and there are limited barriers to entry. Many of the Company's
     existing and potential competitors have financial, personnel and other
     resources significantly greater than those of the Company.

               The Company believes that various legislative initiatives,
     including the recently enacted 1996 Act, have removed remaining legislative
     barriers to local exchange competition. Nevertheless, in light of the
     passage of the 1996 Act, regulators are also likely to provide ILECs with
     increased pricing flexibility as competition increases. If ILECs are
     permitted to lower their rates substantially or engage in excessive volume
     or term discount pricing practices for their customers, the net income or
     cash flow of ICPs and competitive local exchange carriers ("CLECs"),
     including the Company, could be materially adversely affected. In addition,
     while the Company currently competes with AT&T, MCI and others in the
     interexchange services market, the recent federal legislation permits the
     RBOCs to provide interexchange services once certain criteria are met. Once
     the RBOCs begin to provide such services, they will be in a position to
     offer single source service similar to that being offered by Intermedia.
     Recently, a Federal District Court in Texas found unconstitutional certain
     provisions of the 1996 Act restricting the RBOCs from offering long
     distance service in their operating regions until they could demonstrate
     that their networks have been made available to competitive providers of
     local exchange services in those regions.  If that decision is permitted to
     stand, it could result in RBOCs providing interexchange service in their
     operating regions sooner than previously expected.  In addition, AT&T and
     MCI have entered and other interexchange carriers have announced their
     intent to enter into the local exchange services market, which is
     facilitated by the 1996 Act's resale and unbundled network element
     provisions. The Company cannot predict the number of competitors that will
     emerge as a result of existing or new federal and state regulatory or
     legislative actions. Competition from the RBOCs with respect to
     interexchange services or from AT&T, MCI or others with respect to local
     exchange services could have a material adverse effect on the Company's
     business.
         
               Regulation. Intermedia is subject to varying degrees of federal,
     state and local regulation. Intermedia is not currently subject to price
     cap or rate of return regulation at the state or federal level, nor is it
     currently required to obtain FCC authorization for the installation,
     acquisition or operation of its interstate network facilities. Further, the
     FCC issued an order holding that non-dominant carriers, such as Intermedia,
     are required to withdraw interstate tariffs for domestic long distance
     service. That order has been stayed by a federal appeals court and it is
     not clear at this time whether the detariffing order will be implemented.
     Until further action is taken by the court, Intermedia will continue to
     maintain tariffs for these services. In June 1997, the FCC issued another
     order stating that non-dominant carriers, such as Intermedia, could
     withdraw their tariffs for interstate access services. While Intermedia has
     no immediate plans to withdraw its tariff, this FCC order allows Intermedia
     to do so. The FCC does require Intermedia to file tariffs on an ongoing
     basis for international traffic.    
         
               On May 16, 1997, the FCC released an order that fundamentally 
     restructured the "access charges" that ILECs charge to interexchange
     carriers and end user customers. Intermedia believes that the FCC's new
     access charge rules do not adversely affect Intermedia's business plan,
     and that they in fact present significant new opportunities for new
     entrants, including Intermedia. Aspects of the access charge order may be
     changed in the future. Numerous parties have either filed appeals with
     federal courts or asked the FCC to reconsider portions of its new rules.
         
               Intermedia is generally subject to certification or registration
     and tariff or price list filing requirements for intrastate services by
     state regulators. The 1996 Act and the issuance by the FCC of rules
     governing local competition, particularly those requiring the
     interconnection of all networks and the exchange of traffic among the ILEC
     and CLECs, as well as pro-competitive policies already developed by state
     regulatory commissions, have caused fundamental changes in the structure of
     the local exchange markets. On July 18, 1997, the U.S. Court of Appeals for
     the Eighth Circuit issued a decision vacating the FCC's pricing and "most
     favored nation" rules, as well as certain other of the FCC's
     interconnection rules. On October 14, 1997, the Eighth Circuit issued an
     order clarifying its previous decision. In this order, the Court held that
     ILECs have an obligation under the 1996 Act to offer other carriers access
     to the ILECs network elements on an unbundled basis, but the ILECs do not
     have an obligation to recombine those elements for use by other carriers.
     The FCC's and other parties' petitions to the Supreme Court request that
     review of these decisions has been granted. Most recently, on January 22,
     1998, the Eighth Circuit Court reiterated that the FCC is bound by the
     pricing policies of the state regulatory commissions regarding
     interconnection, unbundled access, resale, and transport and termination of
     local telecommunications traffic and rebuffed what it perceived as an
     attempt by the FCC to condition the RBOCs' provision of in-region long
     distance service on compliance with federal pricing policies regarding
     these items. Even though these decisions restrict the role of the FCC in
     the pricing and other issues, these issues remain subject to scrutiny and
     oversight by state regulatory commissions.     
         
               Although Intermedia is not able to predict the impact of these
     decisions on future efforts to negotiate interconnection agreements with
     ILECs, Intermedia's analysis shows that interconnection arrangements that
     have been approved or mandated by state regulatory commissions have been
     consistent with the intent of the 1996 Act to expand local competition and
     Intermedia's business plan. These regulatory developments create
     opportunities for new entrants offering local exchange services to capture
     a portion of the ILECs' nearly 100% market share. Due to the rapid
     development and continuing growth of Intermedia's sales force and its
     competitive advantages in providing integrated telecommunications services,
     the Company believes that it is well positioned to capitalize on the new
     market opportunities emerging in the local exchange market.     
         
               Although passage of the 1996 Act should result in increased 
     opportunities for companies that are competing with the ILECs, no assurance
     can be given that changes in current or future regulations adopted by the
     FCC or state regulators or other legislative or judicial initiatives
     relating to the telecommunications industry would not have a material
     adverse effect on Intermedia. In addition, although the 1996 Act provides
     incentives to the ILECs that are subsidiaries of RBOCs to enter the long
     distance service market by requiring ILECs to negotiate interconnection
     agreements with local competitors, there can be no assurance that these
     ILECs will negotiate quickly with competitors such as Intermedia for the
     required interconnection of the competitor's networks with those of the
     ILECs or that such agreements will be favorable. Moreover, on December 31,
     1997, a Federal District Court in Texas found unconstitutional certain
     provisions of the 1996 Act restricting the RBOCs from offering long
     distance service in their operating regions until they could demonstrate
     that their networks have been made available to competitive providers of
     local exchange services in those regions. The United States and some long
     distance companies have requested a stay of this decision and it is
     expected that they, and others, will seek its reversal on appeal. If the
     District Court's decision is permitted to stand, it could result in the
     RBOCs providing interexchange service in their operating regions sooner
     than previously expected.     

                                       10
<PAGE>
 
               Potential Diminishing Rate of Growth. During the period from 1994
     to 1996, the Company's revenues have grown at a compound annual growth rate
     of 169%. While the Company expects to continue to grow, as its size
     increases it is likely that its rate of growth will diminish.

               Risk of New Service Acceptance by Customers. The Company has
     recently introduced a number of services, primarily local exchange
     services, that the Company believes are important to its long-term growth.
     The success of these services will be dependent upon, among other things,
     the willingness of customers to accept the Company as the provider of such
     services. No assurance can be given that such acceptance will occur; the
     lack of such acceptance could have a material adverse effect on the
     Company.

               Rapid Technological Changes. The telecommunications industry is
     subject to rapid and significant changes in technology. While Intermedia
     believes that, for the foreseeable future, these changes will neither
     materially affect the continued use of its fiber optic networks nor
     materially hinder its ability to acquire necessary technologies, the effect
     on the business of Intermedia of technological changes such as changes
     relating to emerging wireline and wireless transmission technologies,
     including software protocols, cannot be predicted.

               Dependence on Key Personnel. The Company's business is managed by
     a small number of key management and operating personnel, the loss of
     certain of whom could have a material adverse impact on the Company's
     business. The Company believes that its future success will depend in large
     part on its continued ability to attract and retain highly skilled and
     qualified personnel. None of the Company's key executives, other than David
     C. Ruberg, President, Chief Executive Officer and Chairman of the Board, is
     a party to a long-term employment agreement with the Company.

               Risk of Cancellation or Non-Renewal of Network Agreements,
     Licenses and Permits. The Company has lease and/or purchase agreements for
     rights-of-way, utility pole attachments, conduit and dark fiber for its
     fiber optic networks. Although the Company does not believe that any of
     these agreements will be cancelled in the near future, cancellation or non-
     renewal of certain of such agreements could materially adversely affect the
     Company's business in the affected metropolitan area. In addition, the
     Company has certain licenses and permits from local government authorities.
     The 1996 Act requires that local government authorities treat
     telecommunications carriers in a competitively neutral, non-discriminatory
     manner, and that most utilities, including most ILECs and electric
     companies, afford alternative carriers access to their poles, conduits and
     rights-of-way at reasonable rates on non-discriminatory terms and
     conditions. There can be no assurance that the Company will be able to
     maintain its existing franchises, permits and rights or to obtain and
     maintain the other franchises, permits and rights needed to implement its
     strategy on acceptable terms.

               Dependence on Business from Interexchange Carriers ("IXCs"). For
     the year ended December 31, 1996, approximately 10% of the Company's
     consolidated revenues were attributable to access services provided to
     IXCs. The loss of access revenues from IXCs in general could have a
     material adverse effect on the Company's business.

               In addition, the Company's growth strategy assumes increased
     revenues from IXCs from the deployment of local/long distance voice
     switches on its networks and the provision of switched access origination
     and termination services. There is no assurance that the IXCs will continue
     to increase their utilization of the Company's services, or will not reduce
     or cease their utilization of the Company's services, which could have a
     material adverse effect on the Company.

                                       11
<PAGE>
 
               Business Combinations; Change of Control. The Company has from
     time to time held, and continues to hold, preliminary discussions with (i)
     potential strategic investors who have expressed an interest in making an
     investment in or acquiring the Company and (ii) potential joint venture
     partners looking toward the formation of strategic alliances that would
     expand the reach of the Company's networks or services without necessarily
     requiring an additional investment in the Company. In addition to providing
     additional growth capital, management believes that an alliance with an
     appropriate strategic investor would provide operating synergy to, and
     enhance the competitive positions of, both Intermedia and the investor
     within the rapidly consolidating telecommunications industry. There can be
     no assurance that agreements for any of the foregoing will be reached. An
     investment, business combination or strategic alliance could constitute a
     change of control. The Existing Indentures provide that a change of control
     would require the Company to repay the indebtedness outstanding under such
     instruments. If a change of control does occur, there is no assurance that
     the Company would have sufficient funds to make such repayments or could
     obtain any additional debt or equity financing that could be necessary in
     order to repay the Existing Senior Notes.

               Anti-Takeover Provisions. The Company's Certificate of
     Incorporation and Bylaws, the provisions of the Delaware General
     Corporation Law (the "DCGL"), the Existing Indentures, the Series B
     Certificate of Designation,  the Series D Certificate of Designation and
     the Series E Certificate of Designation may make it difficult in some
     respects to effect a change in control of the Company and replace incumbent
     management. In addition, the Company's Board of Directors has adopted a
     Stockholder's Rights Plan, pursuant to which rights to acquire a series of
     preferred stock, exercisable upon the occurrence of certain events, were
     distributed to its stockholders. The existence of these provisions may have
     a negative impact on the price of the Common Stock, may discourage third
     party bidders from making a bid for the Company, or may reduce any premiums
     paid to stockholders for their Common Stock. In addition, the Board has the
     authority to fix the rights and preferences of, and to issue shares of, the
     Company's preferred stock, which may have the effect of delaying or
     preventing a change in control of the Company without action by its
     stockholders.

               Shares Eligible for Future Sale. Future sales of shares by
     existing stockholders under Rule 144 of the Securities Act, or through the
     exercise of outstanding registration rights or the issuance of shares of
     Common Stock upon the exercise of options or warrants or conversion of
     convertible securities could materially adversely affect the market price
     of shares of Common Stock and could materially impair the Company's future
     ability to raise capital through an offering of equity securities.
     Substantially all of the Company's outstanding shares, other than those
     held by affiliates, are transferable without restriction under the
     Securities Act.  No predictions can be made as to the effect, if any, that
     market sales of such shares or the availability of such shares for future
     sale will have on the market price of shares of Common Stock prevailing
     from time to time.

               Forward Looking Statements. The statements contained in this
     Prospectus that are not historical facts are "forward-looking statements"
     (as such term is defined in the Private Securities Litigation Reform Act of
     1995), which can be identified by the use of forward-looking terminology
     such as "estimates," "projects," "anticipates," "expects," "intends,"
     "believes," or the negative thereof or other variations thereon or
     comparable terminology, or by discussions of strategy that involve risks
     and uncertainties. Management wishes to caution the reader that these
     forward-looking statements are only estimates or predictions. No assurance
     can be given that future results will be achieved; actual events or results
     may differ materially as a result of risks facing the Company or actual
     results differing from the assumptions underlying such statements.


     RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
      
               The Company's historical earnings have been insufficient to cover
     combined fixed charges and dividends on preferred stock by $0.6 million,
     $2.3 million, $3.3 million, $19.8 million and $60.0 million for each of the
     years ended December 31, 1992, 1993, 1994, 1995 and 1996, respectively.
     Combined fixed charges and dividends include interest and dividends whether
     paid or accrued. In addition, insufficiencies of $37.6 million and $187.0
     million were experienced in the nine-month periods ended September 30, 1996
     and 1997,     

                                       12

<PAGE>
 
     respectively. On a pro forma basis, after giving effect to the DIGEX, EMI,
     NetSolve and UTT acquisitions, the pending acquisition of Shared
     Technologies and the March 1997 offerings, July 9 Offerings, October 30
     Offerings and December 23 Offering, the Company's earnings were
     insufficient to cover combined fixed charges and dividends on preferred
     stock by $274.0 million for the year ended December 31, 1996 and by $321.1
     million for the nine months ended September 30, 1997.

               See "Risk Factors Substantial Indebtedness; Insufficiency of
     Earnings to Cover Fixed Charges" for a further discussion of factors which
     may have an impact on the Company's ratio of earnings to combined fixed
     charges and preferred stock dividends.
 

                                       13
<PAGE>
 
                                  THE COMPANY

               Intermedia is a rapidly growing ICP, offering a full suite of
     local, long distance and enhanced data telecommunications services to
     business and government end user customers, long distance carriers, ISPs,
     resellers and wireless communications companies. Founded in 1987, the
     Company is currently the third largest (based on annualized
     telecommunications services revenues) among providers generally referred to
     as CLECs after MFS Communications Company, Inc. and Teleport Communications
     Group Inc. As of September 30, 1997, the Company had sales offices in 43
     cities throughout the eastern half of the United States and offered a full
     product package of telecommunications services in 19 metropolitan
     statistical areas. In April 1996, Intermedia became one of the first ICPs
     in the United States to provide integrated switched local and long distance
     service and as of December 16, 1997 had thirteen switches in service.  The
     Company provides enhanced data services, including frame relay, a
     synchronous transfer mode ("ATM") and Internet access services, primarily
     to business and government customers (including over 100 ISPs), in
     approximately 3,800 cities nationwide, utilizing approximately 130 Company-
     owned data switches. Intermedia also serves as a facilities-based
     interexchange carrier to approximately 15,000 customers nationwide.
     Intermedia continues to increase its customer base and network density in
     the eastern half of the United States and is pursuing attractive
     opportunities to add additional services and expand into complementary
     geographic markets.

               Intermedia was incorporated in the State of Delaware on November
     9, 1987, as the successor to a Florida corporation that was founded in
     1986. The Company's principal offices are located at 3625 Queen Palm Drive,
     Tampa, Florida 33619, and its telephone number is (813) 829-0011.



                                USE OF PROCEEDS
    
               Unless otherwise specified in the Prospectus Supplement, the net
     proceeds from the sale of the Securities will be used by the Company and
     Intermedia Capital to finance the continued expansion of Intermedia's
     telecommunications networks, including, but not limited to, network
     electronics, such as local/long distance voice and data switches, and for
     general corporate purposes, including working capital.     
    
               Unless otherwise specified in the Prospectus Supplement, a
     portion of the Company's expansion may occur through acquisitions
     (utilizing cash or securities of the Company) as an alternative to direct
     investments in the assets required to implement the expansion. The
     businesses that the Company may acquire will likely consist of companies
     that own existing networks or companies that provide services that
     complement the Company's existing businesses. The Existing Indentures
     prohibit the Company, but not Intermedia Capital, from acquiring assets or
     businesses which are not involved in the Telecommunications Business (as
     defined therein). The Company is currently evaluating various acquisition
     opportunities, however, no assurance can be given that any potential
     acquisition will be consummated.     

               Prior to the application of the net proceeds as described above,
     such funds will be invested in short-term investment grade securities.

                                       14
<PAGE>
 
                         DESCRIPTION OF DEBT SECURITIES


               The following description of the terms of the Debt Securities
     sets forth certain general terms and provisions of the Debt Securities to
     which any Prospectus Supplement may relate. The particular terms of the
     Debt Securities being offered (the "Offered Debt Securities"), the extent,
     if any, to which such general provisions may apply to the Securities and
     any modifications of or additions to the general terms of the Debt
     Securities applicable in the case of the Offered Debt Securities will be
     described in the Prospectus Supplement relating to such Debt Securities.

               The Senior Debt Securities are to be issued under an indenture to
     be dated as of a date on or prior to the first issuance of Senior Debt
     Securities, as supplemented from time to time (the "Senior Indenture"),
     between the Company and a trustee to be determined by the Company (the
     "Senior Debt Trustee"), and the Subordinated Debt Securities are to be
     issued under an indenture to be dated as of a date on or prior to the first
     issuance of Subordinated Debt Securities, as supplemented from time to time
     (the "Subordinated Indenture"), between the Company and a trustee to be
     determined by the Company (the "Subordinated Debt Trustee"). The term
     "Trustee" as used herein shall refer to either the Senior Debt Trustee or
     the Subordinated Debt Trustee, as appropriate, for Senior Debt Securities
     or Subordinated Debt Securities. The form of the Senior Indenture and the
     form of the Subordinated Indenture (being referred to herein collectively
     as the "Indentures" and individually as an "Indenture") are filed as
     exhibits to the Registration Statement. The Indentures are subject to and
     governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The
     statements made under this heading relating to the Debt Securities and the
     Indentures are summaries of the provisions thereof, do not purport to be
     complete and are qualified in their entirety by reference to the
     Indentures, including the definitions of certain terms therein and in the
     TIA. Certain capitalized terms used below but not defined herein have the
     meanings ascribed to them in the applicable Indenture.

     GENERAL

               The Debt Securities will be direct, and may be secured or
     unsecured, obligations of the Company.  The indebtedness represented by the
     unsecured Senior Debt Securities will rank equally with all other unsecured
     and unsubordinated indebtedness of the Company. The indebtedness
     represented by the secured Senior Debt Securities will rank equally with
     all other secured and unsubordinated indebtedness of the Company and will
     rank senior to all other unsecured indebtedness of the Company with respect
     to the security interest.  The indebtedness represented by the Subordinated
     Debt Securities will be subordinated in right of payment to the prior
     payment in full of the Senior Indebtedness of the Company (including the
     Senior Debt Securities) as described under "Subordination" below. The
     Indentures provide that the Debt Securities may be issued without limit as
     to aggregate principal amount, in one or more series, in each case as
     established from time to time in or pursuant to authority granted by a
     resolution of the Board of Directors of the Company or as established in
     one or more indentures supplemental to the Indenture. All Debt Securities
     of one series need not be issued at the same time and, unless otherwise
     provided, a series may be reopened, without the consent of the holders of
     the Debt Securities of such series, for issuances of additional Debt
     Securities of such series.

               The Indentures provide that there may be more than one Trustee
     thereunder, each with respect to one or more series of Debt Securities. Any
     Trustee under the Indentures may resign or be removed with respect to one
     or more series of Debt Securities, and a successor Trustee may be appointed
     to act with respect to such series. In the event that two or more persons
     are acting as Trustee with respect to different series of Debt Securities,
     each such Trustee shall be a Trustee of a trust under the Indenture
     separate and apart from the trust administered by any other Trustee, and,
     except as otherwise indicated herein, any action described herein to be
     taken by the Trustee may be taken by each such Trustee with respect to, and
     only with respect to, the one or more series of Debt Securities for which
     it is Trustee under the applicable Indenture.

                                       15
<PAGE>
 
               The accompanying Prospectus Supplement will set forth the terms
     of the Offered Debt Securities, which may include the following:

               (1) The title of the Offered Debt Securities and whether they are
          Senior Debt Securities or Subordinated Debt Securities (which shall
          distinguish the Debt Securities of such Offered Debt Securities from
          all other series of Debt Securities).

               (2) The aggregate principal amount of the Offered Debt Securities
          and any limit on the aggregate principal amount of the Offered Debt
          Securities of such series.

               (3) The percentage of the principal amount at which the Offered
          Debt Securities will be issued and, if other than the principal amount
          thereof, the portion of the principal amount thereof payable upon
          declaration of acceleration of the maturity or upon redemption thereof
          or the method by which such portion shall be determined.

               (4) The date or dates on which or periods during which the
          Offered Debt Securities may be issued, and the date or dates, or the
          method by which such date or dates will be determined, on which the
          principal of (and premium, if any, on) the Offered Debt Securities
          are, or may be, payable (which may be determined by the Company from
          time to time as set forth in the Prospectus Supplement for such
          Offered Debt Securities).

               (5) The rate or rates (which may be variable or fixed) at which
          the Offered Debt Securities will bear interest, if any, or the method
          by which such rate or rates shall be determined, the date or dates
          from which such interest, if any, shall accrue or the method by which
          such date or dates shall be determined, the interest payment dates on
          which such interest will be payable (or the method of determination
          thereof) and the record dates, if any, for the interest payable on
          such interest payment dates, and the notice, if any, to holders
          regarding the determination of interest and the manner of giving such
          notice, the basis upon which interest shall be calculated if other
          than that of a 360-day year of twelve 30-day months and any conditions
          or contingencies as to the payment of interest in cash or
          otherwise, if any.

               (6) The place or places where the principal of (and premium, if
          any) and interest on the Offered Debt Securities shall be payable; the
          extent to which, or the manner in which, any interest payable on any
          Global Note (as defined below) on an interest payment date will be
          paid, and the manner in which any principal of, or premium, if any,
          on, any Global Note will be paid and whether any Global Note will
          require any notation to evidence payment of principal or interest.

               (7) The obligation, if any, of the Company to redeem, repay,
          purchase or offer to purchase the Offered Debt Securities pursuant to
          any mandatory redemption, sinking fund or analogous provisions or upon
          other conditions or at the option of the Holder thereof and the period
          or periods within which, or the dates on which, the prices at which
          and the terms and conditions upon which the Offered Debt Securities
          shall be redeemed, repaid, purchased or offered to be purchased, in
          whole or in part, pursuant to such obligation.

               (8) The right, if any, of the Company to redeem the Offered Debt
          Securities at its option and the period or periods within which, or
          the date or dates on which, the price or prices at which, and the
          terms and conditions upon which Offered Debt Securities may be
          redeemed, if any, in whole or in part, at the option of the Company or
          otherwise.

               (9) The denominations of the Offered Debt Securities if other
          than denominations of $1,000 and any integral multiple thereof.

                                       16
<PAGE>
 
               (10) Whether the Offered Debt Securities are to be issued as
          original issue discount securities ("Discount Securities") and the
          amount of discount at which such Offered Debt Securities may be issued
          and, if other than the principal amount thereof, the portion of the
          principal amount of Offered Debt Securities which shall be payable
          upon declaration of acceleration of the Maturity thereof upon an Event
          of Default.

               (11) Provisions, if any, for the defeasance or discharge of
          certain of the Company's obligations with respect to the Offered Debt
          Securities.

               (12) Whether provisions for payment of additional amounts or tax
          redemptions shall apply and, if such provisions shall apply, such
          provisions.

               (13) The date as of which any Offered Debt Securities shall be
          dated.

               (14) The applicable overdue interest rate, if any.

               (15) If the Offered Debt Securities do not bear interest,
          applicable dates for determining record holders of Offered Debt
          Securities.

               (16) Any addition to, or modification or deletion of, any Events
          of Default, covenants or terms of the subordination provided for in
          the applicable Indenture with respect to the Offered Debt Securities.

               (17) Whether the Offered Debt Securities shall be issued in whole
          or in part in the form of one or more Global Notes and, in such case,
          the depositary or any common depositary for such Global Notes; and the
          manner in which and the circumstances under which Global Notes
          representing Offered Debt Securities may be exchanged for Debt
          Securities in definitive form.

               (18) The designation, if any, of any depositaries, trustees
          (other than the applicable Trustee), paying agents, authenticating
          agents, security registrars (other than the Trustee) or other agents
          with respect to the Offered Debt Securities.

               (19) If the Offered Debt Securities are to be issuable in
          definitive form only upon receipt of certain certificates or other
          documents or upon satisfaction of certain conditions, the form and
          terms of such certificates, documents or conditions.

               (20) Whether the Offered Debt Securities will be convertible into
          shares of Common Stock or Preferred Stock and, if so, the terms and
          conditions, which may be in addition to or in lieu of the provisions
          contained in the Indentures, upon which such Offered Debt Securities
          will be so convertible, including the conversion price and the
          conversion period.

               (21) The portion of the principal amount of the Offered Debt
          Securities which will be payable upon declaration of acceleration of
          the maturity thereof, if other than the principal amount thereof.

               (22) The nature, content and dates for reports by the Company to
          the holders of the Offered Debt Securities or the Trustees.

               (23) Any other terms of the Offered Debt Securities not specified
          in the Indenture under which such Offered Debt Securities are to be
          issued.

               Each Indenture provides that the aggregate principal amount of
     Debt Securities that may be issued thereunder is unlimited. The Debt
     Securities may be issued in one or more series thereunder, in each case

                                       17
<PAGE>
 
     as authorized from time to time by the Board of Directors of the Company,
     or any committee thereof or any duly authorized officer.

               In the event that Discount Securities are issued, the Federal
     income tax consequences and other special considerations applicable to such
     Discount Securities will be described in the Prospectus Supplement relating
     thereto.

               The general provisions of the Indentures do not contain any
     provisions that would limit the ability of the Company or its Subsidiaries
     to incur indebtedness or that would afford holders of Debt Securities
     protection in the event of a highly leveraged or similar transaction
     involving the Company or its Subsidiaries. Reference is made to the
     accompanying Prospectus Supplement for information with respect to any
     deletions from, modifications of or additions, if any, to the Events of
     Default of the Company described below that are applicable to the Offered
     Debt Securities or any covenants or other provisions providing event risk
     or similar protection.

               All of the Debt Securities of a series need not be issued at the
     same time, and may vary as to interest rate, maturity and other provisions
     and unless otherwise provided, a series may be reopened for issuance of
     additional Debt Securities of such series.

               The Debt Securities of certain series may be issued under the
     Indentures upon the exchange or conversion of exchangeable or convertible
     Debt Securities. The specific terms of exchange or conversion of any such
     Debt Securities and the specific terms of the Debt Securities issuable upon
     any such exchange or conversion will be described in the Prospectus
     Supplement relating to any such exchangeable or convertible Debt
     Securities.


     DENOMINATIONS, REGISTRATION AND TRANSFER

               Unless specified in the Prospectus Supplement, the Debt
     Securities of any series shall be issuable in denominations of $1,000 and
     any integral multiple thereof and shall be payable only in U.S. dollars.
     The Indentures also provide that Debt Securities of a series may be
     issuable in global form. See "Book-Entry Debt Securities."

               Upon surrender for registration of transfer of any Registered
     Security of any series at the office or agency of the Company maintained
     for such purpose, the Company shall deliver, in the name of the designated
     transferee, one or more new Registered Securities of the same series of
     like aggregate principal amount of such denominations as are authorized for
     Registered Securities of such series and of a like Stated Maturity and with
     like terms and conditions. No service charge will be made for any transfer
     or exchange of Debt Securities, but the Company may require payment of a
     sum sufficient to cover any tax or other governmental charge payable in
     connection therewith.

               The Company shall not be required (i) to register, transfer or
     exchange Debt Securities of any series during a period beginning at the
     opening of business 15 days before the day of the transmission of a notice
     of redemption of Debt Securities of such series selected for redemption and
     ending at the close of business on the day of such transmission, or (ii) to
     register, transfer or exchange any Debt Security so selected for redemption
     in whole or in part, except the unredeemed portion of any Debt Security
     being redeemed in part.


     EVENTS OF DEFAULT

               Under the Indentures, "Event of Default" with respect to the Debt
     Securities of any series means any one of the following events (whatever
     the reason for such Event of Default and whether it shall be

                                       18
<PAGE>
 
     voluntary or involuntary or be effected by operation of law, pursuant to
     any judgment, decree or order of any court or any order, rule or regulation
     of any administrative or governmental body): (1) default in the payment of
     any interest upon any Debt Security of such series when it becomes due and
     payable, and continuance of such default for a period of 30 days; (2)
     default in the payment of the principal of (and premium, if any, on) any
     Debt Security of such series at its Maturity; (3) default in the deposit of
     any sinking fund payment, when and as due by the terms of a Debt Security
     of such series; (4) default in the performance, or breach, of any covenant
     or warranty in the applicable Indenture (other than a covenant or warranty
     a default in whose performance or whose breach is elsewhere specifically
     dealt with or which expressly has been included in the applicable Indenture
     solely for the benefit of Debt Securities of a series other than such
     series), and continuance of such default or breach for a period of 30 days
     after there has been given by registered or certified mail, to the Company
     by the applicable Trustee or to the Company and the applicable Trustee by
     the Holders of at least 30% in principal amount of the outstanding Debt
     Securities of such series, a written notice specifying such default or
     breach and requiring it to be remedied and stating that such notice is a
     "Notice of Default"; (5) certain events of bankruptcy, insolvency or
     reorganization with respect to the Company; or (6) any other Event of
     Default provided with respect to Debt Securities of that series.

               Each Indenture requires the Company to file with the applicable
     Trustee, annually, an officers' certificate as to the Company's compliance
     with all conditions and covenants under the applicable Indenture. Each
     Indenture provides that the applicable Trustee may withhold notice to the
     Holders of a series of Debt Securities of any default (except payment
     defaults on such Debt Securities) if it considers such withholding to be in
     the interest of the Holders of such series of Debt Securities.

               If an Event of Default with respect to Debt Securities of any
     series at the time outstanding occurs and is continuing, then in every case
     the applicable Trustee or the Holders of not less than 25% in principal
     amount of the outstanding Debt Securities of such series may declare the
     principal amount (or, if any Debt Securities of such series are Discount
     Securities, such portion of the principal amount of such Discount
     Securities as may be specified in the terms of such Discount Securities) of
     all the Debt Securities of such series to be due and payable immediately,
     by a notice in writing to the Company (and to the applicable Trustee if
     given by Holders), and upon any such declaration such principal amount (or
     specified amount), plus accrued and unpaid interest (and premium, if any)
     shall become immediately due and payable. Upon payment of such amount, all
     obligations of the Company in respect of the payment of principal of the
     Debt Securities of such series shall terminate.

               Subject to the provisions of each Indenture relating to the
     duties of the applicable Trustee, in case an Event of Default with respect
     to Debt Securities of a particular series shall occur and be continuing,
     the applicable Trustee shall be under no obligation to exercise any of its
     rights or powers under such Indenture at the request, order or direction of
     any of the Holders of Debt Securities of that series, unless such Holders
     shall have offered to the applicable Trustee reasonable security or
     indemnity against the costs, expenses and liabilities which might be
     incurred by it in complying with such request or direction. Subject to such
     provisions for the indemnification of the applicable Trustee, the Holders
     of a majority in principal amount of the outstanding Debt Securities of
     such series shall have the right to direct the time, method and place of
     conducting any proceeding for any remedy available to the applicable
     Trustee under such Indenture, or exercising any trust or power conferred on
     the applicable Trustee with respect to the Debt Securities of that series.

               At any time after such a declaration of acceleration with respect
     to Debt Securities of any series has been made and before a judgment or
     decree for payment of the money due has been obtained by the applicable
     Trustee as provided in the Indentures, the Holders of a majority in
     principal amount of the outstanding Debt Securities of such series, by
     written notice to the Company and the applicable Trustee, may rescind and
     annul such declaration and its consequences, subject to any terms or
     conditions specified in the applicable Prospectus Supplement.

                                       19
<PAGE>
 
     MERGER OR CONSOLIDATION

               Each Indenture provides that the Company may not consolidate with
     or merge with or into or wind up into (whether or not the Company is the
     surviving corporation) or sell, assign, convey, transfer or lease its
     properties and assets substantially as an entirety to any Person, unless
     (1) the corporation formed by such consolidation or into which the Company
     is merged or the Person which acquires by conveyance or transfer, or which
     leases, the properties and assets of the Company substantially as an
     entirety (the "successor corporation") is a corporation organized and
     existing under the laws of the United States or any State or territory
     thereof or the District of Columbia and expressly assumes by a supplemental
     indenture the due and punctual payment of the principal of (and premium, if
     any) and interest on all the Debt Securities issued under the applicable
     Indenture and the performance of every covenant in the applicable Indenture
     on the part of the Company to be performed or observed; (2) immediately
     after giving effect to such transaction, no Event of Default under the
     applicable Indenture, and no event which, after notice or lapse of time, or
     both, would become such an Event of Default, shall have happened and be
     continuing; and (3) such other conditions as may be specified in the
     applicable Prospectus Supplement.


     MODIFICATION OR WAIVER

               Without prior notice to or consent of any Holders, the Company
     and the applicable Trustee, at any time and from time to time, may modify
     the applicable Indenture for any of the following purposes: (1) to evidence
     the succession of another corporation to the rights of the Company and the
     assumption by such successor of the covenants and obligations of the
     Company in the applicable Indenture and in the Debt Securities issued
     thereunder in accordance with the terms of the applicable Indenture; (2) to
     add to the covenants of the Company for the benefit of the Holders of all
     or any series of Debt Securities (and if such covenants are to be for the
     benefit of less than all series, stating that such covenants are expressly
     being included solely for the benefit of such series), or to surrender any
     right or power conferred in the applicable Indenture upon the Company; (3)
     to add any additional Events of Default (and if such Events of Default are
     to be applicable to less than all series, stating that such Events of
     Default are expressly being included solely to be applicable to such
     series); (4) to change or eliminate any of the provisions of the applicable
     Indenture, provided that any such change or elimination will become
     effective only when there is no outstanding Debt Security issued thereunder
     of any series created prior to such modification which is entitled to the
     benefit of such provision and as to which such modification would apply;
     (5) to secure the Debt Securities issued thereunder or to provide that any
     of the Company's obligations under the Debt Securities or the applicable
     Indenture shall be guaranteed and the terms and conditions for the release
     or substitution of such security or guarantee; (6) to supplement any of the
     provisions of the applicable Indenture to such extent as is necessary to
     permit or facilitate the defeasance and discharge of any series of Debt
     Securities, provided that any such action will not adversely affect the
     interests of the Holders of Debt Securities of such series or any other
     series of Debt Securities issued under such Indenture in any material
     respect; (8) to establish the form or terms of Debt Securities as permitted
     by the applicable Indenture; (9) to evidence and provide for the acceptance
     of appointment thereunder by a successor Trustee with respect to one or
     more series of Debt Securities and to add to or change any of the
     provisions of the applicable Indenture as is necessary to provide for or
     facilitate the administration of the trusts thereunder by more than one
     Trustee; or (10) to cure any ambiguity, to correct or supplement any
     provision in the applicable Indenture which may be defective or
     inconsistent with any other provision therein, to eliminate any conflict
     between the terms of the applicable Indenture and the Debt Securities
     issued thereunder and the TIA or to make any other provisions with respect
     to matters or questions arising under the applicable Indenture which will
     not be inconsistent with any provision of the applicable Indenture;
     provided such other provisions shall not adversely affect the interests of
     the Holders of outstanding Debt Securities of any series created thereunder
     prior to such modification in any material respect.

               With the written consent of the Holders of not less than a
     majority in principal amount of the outstanding Debt Securities of each
     series affected by such modification voting separately, the Company and the

                                       20
<PAGE>
 
     applicable Trustee may modify the applicable Indenture for the purpose of
     adding any provisions to or changing in any manner or eliminating any of
     the provisions of the applicable Indenture or of modifying in any manner
     the rights of the Holders of Debt Securities under the applicable
     Indenture; provided, however, that such modifications may not, without the
     consent of the Holder of each outstanding Debt Security of each series
     affected, conflict with the required provisions of the TIA or make any
     change or modification specified as requiring the consent of each such
     Holder in the applicable Prospectus Supplement.

               A modification which changes or eliminates any covenant or other
     provision of the applicable Indenture with respect to one or more
     particular series of Debt Securities or which modifies the rights of the
     Holders of Debt Securities of such series with respect to such covenant or
     other provision, shall be deemed not to affect the rights under the
     applicable Indenture of the Holders of Debt Securities of any other series.

               Each of the Indentures provides that the Holders of not less than
     a majority in aggregate principal amount of the then outstanding Debt
     Securities of any series, by notice to the relevant Trustee, may on behalf
     of the Holders of the Debt Securities of such series waive any Default or
     Event of Default and its consequences under the applicable Indenture,
     except (1) a continuing Default or Event of Default in the payment of
     interest on, premium, if any, or the principal of, any such Debt Security
     held by a non-consenting Holder or (2) a default in respect of a covenant
     or provision hereof which cannot be modified or amended without the consent
     of the Holder of each outstanding Debt Security of each series affected.


     SUBORDINATION

               Upon any distribution of assets of the Company upon the
     dissolution, winding up, liquidation or reorganization of the Company, the
     payment of the principal of (and premium, if any) and interest on the
     Subordinated Debt Securities will be subordinated to the extent provided in
     the Subordinated Indenture or as described in the applicable Prospectus
     Supplement in right of payment to the prior payment in full of all Senior
     Indebtedness, including Senior Debt Securities, but the obligation of the
     Company to make payment of principal (and premium, if any) or interest on
     the Subordinated Debt Securities will not otherwise be affected. Unless
     otherwise indicated in a Prospectus Supplement, no payment on account of
     principal (and premium, if any), sinking funds or interest may be made on
     the Subordinated Debt Securities at any time when there is a default in the
     payment of principal (and premium, if any), interest or certain other
     obligations on Senior Indebtedness. In addition, the Prospectus Supplement
     for each series of Subordinated Debt Securities may provide that payments
     on account of principal (any premium, if any) or interest in respect of
     such Subordinated Debt Securities may be delayed or not paid under the
     circumstances and for the periods specified in such Prospectus Supplement.
     Unless otherwise indicated in a Prospectus Supplement, in the event that,
     notwithstanding the foregoing, any payment by the Company described in the
     foregoing sentence is received by the Trustee under the Subordinated
     Indenture or the Holders of any of the Subordinated Debt Securities before
     all Senior Indebtedness is paid in full, such payment or distribution shall
     be paid over to the Holders of such Senior Indebtedness or on their behalf
     for application to the payment of all such Senior Indebtedness remaining
     unpaid until all such Senior Indebtedness shall have been paid in full,
     after giving effect to any concurrent payment or distribution to the
     Holders of such Senior Indebtedness. Subject to payment in full of Senior
     Indebtedness, the Holders of the Subordinated Debt Securities will be
     subrogated to the rights of the Holders of the Senior Indebtedness to the
     extent of payments made to the Holders of such Senior Indebtedness out of
     the distributive share of the Subordinated Debt Securities.

               By reason of such subordination, in the event of a distribution
     of assets upon insolvency, certain general creditors of the Company may
     recover more, ratably, than holders of the Subordinated Debt Securities.
     The Subordinated Indenture provides that the subordination provisions
     thereof shall not apply to money and securities held in trust pursuant to
     the satisfaction and discharge and the legal defeasance provisions of the
     Subordinated Indenture.

                                       21
<PAGE>
 
               If this Prospectus is being delivered in connection with the
     offering of a series of Subordinated Debt Securities, the accompanying
     Prospectus Supplement or the information incorporated by reference therein
     will set forth the approximate amount of Senior Indebtedness outstanding as
     of a recent date. "Senior Indebtedness" with respect to any series of
     Subordinated Debt Securities shall have the meaning specified in the
     applicable Prospectus Supplement for such series.

                                       22
<PAGE>
 
                    DESCRIPTION OF OUTSTANDING INDEBTEDNESS


     12 1/2% NOTES

       The Company has outstanding an aggregate principal amount of $330,000,000
     of 12 1/2% Senior Discount Notes due 2006 (the "12 1/2% Notes), with an
     aggregate accreted value of $213,001,000 as of September 30, 1997. The 12
     1/2% Notes were issued at a substantial discount from their principal
     amount and mature on May 15, 2006.Cash interest does not accrue on the
     12 1/2% Notes prior to May 15, 2001. Commencing November 15, 2001, cash
     interest on the 12 1/2% Notes will be payable semi-annually in arrears on
     May 15 and November 15 of each year at a rate of 12 1/2% per annum. The 12
     1/2% Notes may be redeemed at the Company's option at any time, in whole or
     in part, on or after May 15, 2001 upon payment of the redemption price plus
     accrued and unpaid interest, if any, to the date of redemption. The 12 1/2%
     Notes are unsecured obligations of the Company ranking pari passu in right
     of payment of principal and interest with all other existing and future
     senior indebtedness of the Company, including the 11 1/4% Notes, the 8 7/8%
     Notes and the 8 1/2 Notes, and rank senior to any future subordinated
     indebtedness. In the event of a change of control of the Company prior to
     May 15, 2001, holders of the 12 1/2% Notes have the right to require the
     Company to repurchase their 12 1/2% Notes, in whole or in part, at a price
     equal to 101% of the accreted value thereof or, in the case of any such
     purchase on or after May 15, 2001, at 101% of the principal amount thereof,
     plus accrued and unpaid interest, if any, to the date of purchase.
 
       The covenants in the 12 1/2% Notes Indenture are substantially similar to
     the covenants in the indentures for the 11 1/4% Notes and the 8 7/8% Notes
     and are substantially similar (with modifications to certain definitions
     and exceptions) to the covenants in the 8 1/2% Notes Indenture.  The 12
     1/2% Notes Indenture contains certain covenants that, among other things,
     limit the ability of the Company and its subsidiaries to make certain
     restricted payments, incur additional indebtedness and issue preferred
     stock, pay dividends or make other distributions, repurchase equity
     interests or subordinated indebtedness, engage in sale and leaseback
     transactions, create certain liens, enter into certain transactions with
     affiliates, sell assets of the Company or its subsidiaries, conduct certain
     lines of business, issue or sell equity interests of the Company's
     subsidiaries or enter into certain mergers and consolidations. In addition,
     under certain circumstances, the Company is required to offer to purchase
     12 1/2% Notes at a price equal to 100% of the accreted value thereof, if
     such circumstances occur prior to May 15, 2001, or at 100% of the principal
     amount thereof, if such circumstances occur on or after May 15, 2001, plus
     accrued and unpaid interest, if any, to the date of purchase with the
     proceeds of certain asset sales. This description of the 12 1/2% Notes is
     intended as a summary and is qualified in its entirety by reference to the
     12 1/2% Notes Indenture.

     11 1/4% NOTES

          The Company has outstanding an aggregate principal amount at maturity
     of $649,000,000 of 11 1/4% Senior Discount Notes due 2007 (the "11 1/4%
     Notes), with an aggregate accreted value of $383,666,000 as of September
     30, 1997. The 11 1/4% Notes were issued at a substantial discount from
     their principal amount and mature on July 15, 2007.  Cash interest does not
     accrue on the 11 1/4% Notes prior to July 15, 2002. Commencing January 15,
     2003, cash interest on the 11 1/4% Notes will be payable semi-annually in
     arrears on July 15 and January 15 of each year at a rate of 11 1/4% per
     annum. The 11 1/4% Notes may be redeemed at the Company's option at any
     time, in whole or in part, on or after July 15, 2002  upon payment of the
     redemption price plus accrued and unpaid interest, if any, to the date of
     redemption. The 11 1/4% Notes are unsecured obligations of the Company
     ranking pari passu in right of payment of principal and interest with all
     other existing and future senior indebtedness of the Company, including the
     8 7/8% Notes, the 12 1/2% Notes and the 8 1/2% Notes, and rank senior to
     any future subordinated indebtedness. In the event of a change of control
     of the Company prior to July 15, 2002, holders of the 11 1/4% Notes have
     the right to require the Company to repurchase their 11 1/4% Notes, in
     whole or in part, at a price equal to 101% of the accreted value

                                       23

<PAGE>
 
     thereof or, in the case of any such purchase on or after July 15, 2002, at
     101% of the principal amount thereof, plus accrued and unpaid interest, if
     any, to the date of purchase.

       The covenants in the 11 1/4% Notes Indenture are substantially similar to
     the covenants in the indentures for the 12 1/2%Notes and the 8 7/8% Notes
     and are substantially similar (with modifications to certain definitions
     and exceptions) to the covenants in the 8 1/2% Notes Indenture.  The 11
     1/4% Notes Indenture contains certain covenants that, among other things,
     limit the ability of the Company and its subsidiaries to make certain
     restricted payments, incur additional indebtedness and issue preferred
     stock, pay dividends or make other distributions, repurchase equity
     interests or subordinated indebtedness, engage in sale and leaseback
     transactions, create certain liens, enter into certain transactions with
     affiliates, sell assets of the Company or its subsidiaries, conduct certain
     lines of business, issue or sell equity interests of the Company's
     subsidiaries or enter into certain mergers and consolidations. In addition,
     under certain circumstances, the Company is required to offer to purchase
     11 1/4% Notes at a price equal to 100% of the accreted value thereof, if
     such circumstances occur prior to July 15, 2002, or at 100% of the
     principal amount thereof, if such circumstances occur on or after July 15,
     2002, plus accrued and unpaid interest, if any, to the date of purchase
     with the proceeds of certain asset sales. This description of the 11 1/4%
     Notes is intended as a summary and is qualified in its entirety by
     reference to the 11 1/4% Notes Indenture.

     8 7/8% NOTES

       The Company has outstanding an aggregate principal amount of $260,250,000
     of 8 7/8% Senior Notes due 2007 (the "8 7/8% Notes), which will mature on
     November 1, 2007. Cash interest on the 8 7/8% Notes is payable semi-
     annually in arrears on May 1 and November 1 of each year at a rate of 8
     7/8% per annum. The 8 7/8% Notes may be redeemed at the Company's option at
     any time, in whole or in part, on or after November 1, 2002 upon payment of
     the redemption price plus accrued and unpaid interest, if any, to the date
     of redemption. The 8 7/8% Notes are unsecured obligations of the Company
     ranking pari passu in right of payment of principal and interest with all
     other existing and future senior indebtedness of the Company, including the
     12 1/2% Notes, the 11 1/4% Notes and the 8 1/2% Notes, and rank senior to
     any future subordinated indebtedness. In the event of a change of control
     of the Company, holders of the 8 7/8% Notes have the right to require the
     Company to repurchase their 8 7/8% Notes, in whole or in part, at a price
     equal to 101% of the principal amount thereof, plus accrued and unpaid
     interest, if any, to the date of purchase.
 
       The covenants in the 8 7/8% Notes Indenture are substantially similar to
     the covenants in the indentures for the 12 1/2% Notes and 11 1/4% Notes and
     are substantially similar (with modifications to certain definitions and
     exceptions) to the covenants in the 8 1/2% Notes Indenture. The 8 7/8%
     Notes Indenture contains certain covenants that, among other things, limit
     the ability of the Company and its subsidiaries to make certain restricted
     payments, incur additional indebtedness and issue preferred stock, pay
     dividends or make other distributions, repurchase equity interests or
     subordinated indebtedness, engage in sale and leaseback transactions,
     create certain liens, enter into certain transactions with affiliates, sell
     assets of the Company or its subsidiaries, conduct certain lines of
     business, issue or sell equity interests of the Company's subsidiaries or
     enter into certain mergers and consolidations. In addition, under certain
     circumstances, the Company is required to offer to purchase 8 7/8% Notes at
     a price equal to 100% of the principal amount thereof, plus accrued and
     unpaid interest, if any, to the date of purchase with the proceeds of
     certain asset sales. This description of the 8 7/8% Notes is intended as a
     summary and is qualified in its entirety by reference to the 8 7/8% Notes
     Indenture.

     8 1/2% NOTES

       The Company has outstanding an aggregate principal amount of $400,000,000
     of 8 1/2% Senior Notes due 2008 (the "8 1/2% Notes"), which will mature on
     January 15, 2008. Cash interest on the 8 1/2% Notes is payable semi-
     annually in arrears on January 15 and July 15 of each year at a rate of 8
     1/2% per annum. The

                                       24
<PAGE>
 
     8 1/2% Notes may be redeemed at the Company's option at any time, in whole
     or in part, on or after January 15, 2003 upon payment of the redemption
     price plus accrued and unpaid interest, if any, to the date of redemption.
     The 8 1/2% Notes are unsecured obligations of the Company ranking pari
     passu in right of payment of principal and interest with all other existing
     and future senior indebtedness of the Company, including the 12 1/2% Notes,
     the 11 1/4% Notes and the 8 7/8% Notes, and rank senior to any future
     subordinated indebtedness. In the event of a change of control of the
     Company, holders of the 8 1/2% Notes have the right to require the Company
     to repurchase their 8 1/2% Notes, in whole or in part, at a price equal to
     101% of the principal amount thereof, plus accrued and unpaid interest, if
     any, to the date of purchase.
 
       The covenants in the 8 1/2% Notes Indenture are substantially similar to
     the covenants in the indentures for the 12 1/2% Notes, the 11 1/4% Notes
     and the 8 7/8% Notes. The 8 1/2% Notes Indenture contains certain covenants
     that, among other things, limit the ability of the Company and its
     subsidiaries to make certain restricted payments, incur additional
     indebtedness and issue preferred stock, pay dividends or make other
     distributions, repurchase equity interests or subordinated indebtedness,
     engage in sale and leaseback transactions, create certain liens, enter into
     certain transactions with affiliates, sell assets of the Company or its
     subsidiaries, conduct certain lines of business, issue or sell equity
     interests of the Company's subsidiaries or enter into certain mergers and
     consolidations. In addition, under certain circumstances, the Company is
     required to offer to purchase 8 7/8% Notes at a price equal to 100% of the
     principal amount thereof, plus accrued and unpaid interest, if any, to the
     date of purchase with the proceeds of certain asset sales. This description
     of the 8 1/2% Notes is intended as a summary and is qualified in its
     entirety by reference to the 8 1/2% Notes Indenture.

     CAPITAL LEASE OBLIGATIONS

       As of September 30, 1997, the Company had outstanding approximately $21.2
     million aggregate principal amount of capital lease obligations arising
     primarily from 19 agreements for leases of fiber optic cable used in
     various of the Company's networks. The effective interest rates under these
     agreements range from 10.5% to 13.5% and expire, subject to various
     Intermedia renewal options, from 2001 to 2016.

                                       25
<PAGE>
 
                          DESCRIPTION OF CAPITAL STOCK

          Intermedia's authorized capital stock consists of 50,000,000 shares of
     Common Stock, par value $.01 per share, and 2,000,000 shares of Preferred
     Stock, par value $1.00 per share ("Preferred Stock"). As of November 30,
     1997, there were 17,315,317 shares of Common Stock, 323,499.1404 shares of
     Series B Preferred Stock, 69,000 shares of Series D Preferred Stock and
     80,000 shares of Series E Preferred Stock issued and outstanding. On a
     fully-diluted basis, at that date, the Company had outstanding 32,796,833
     shares of Common Stock assuming (a) the exercise of the Public Warrants
     (defined below), (b) the exercise of the warrant held by Ralph J. Sutcliffe
     to purchase 100,000 shares of Common Stock at an exercise price of $41.50
     per share, (c) the exercise of the warrant granted by DIGEX prior to the
     DIGEX Aquisition and held by Current Science Group, Inc., formerly known as
     Electronic Press Services Inc., which upon consummation of the DIGEX
     Acquisition was converted into the right to purchase 83,870 shares of
     Common Stock of the Company at an exercise price of $21.65 per share, (d)
     the exercise of all outstanding options issued pursuant to the Company's
     employee stock option plans and (e) conversions of the Depositary Shares,
     the Series D Preferred Stock and the Series E Preferred Stock.  As of
     November 30, 1997, the Company has reserved (i) 4,364,410 shares of Common
     Stock for issuance pursuant to the Company's employee stock option plans,
     (ii) 350,400 shares of Common Stock for issuance upon exercise of the
     Public Warrants, (iii) 276,500.8596 shares of Series B Preferred Stock for
     issuance as dividends on the outstanding shares of Series B Preferred
     Stock, (iv) 40,000 shares of Series C Preferred Stock for issuance in
     connection with the Stockholder's Rights Plan, (v) 4,434,448 shares of
     Common Stock for issuance on conversion of the Series D Preferred Stock,
     (vi) 1,938,728 shares of Common Stock for issuance as dividends on the
     outstanding shares of Series D Preferred Stock, (vii) 3,307,425 shares of
     Common Stock for issuance on conversion of the Series E Preferred Stock,
     (viii) 933,334 shares of Common Stock for issuance as dividends on the
     outstanding shares of Series E Preferred Stock, (ix) 100,000 shares of
     Common Stock for issuance upon exercise of the warrant held by Ralph J.
     Sutcliffe and (x) 83,870 shares of Common Stock for issuance upon exercise
     of the warrant held by Current Science Group, Inc., formerly known as
     Electronic Press Services Inc.  All outstanding shares of Common Stock,
     Series B Preferred Stock, Series D Preferred Stock and Series E Preferred
     Stock are fully paid and non-assessable.

     COMMON STOCK

          Holders of Common Stock are entitled to one vote for each share held
     of record on all matters submitted to a vote of the stockholders. Holders
     of Common Stock do not have cumulative rights, so that holders of more than
     50% of the shares of Common Stock are able to elect all of Intermedia's
     directors eligible for election in a given year. For a description of the
     classification of the Board, see "-Delaware Law and Certain Provisions of
     Intermedia's Certificate of Incorporation and Bylaws." Subject to the
     preferences that may be applicable to any then outstanding Preferred Stock,
     holders of Common Stock are entitled to receive ratably such dividends, if
     any, as may be declared from time to time by the Board out of funds legally
     available therefor. See "-Dividend Restrictions." Upon any liquidation,
     dissolution or winding up, whether voluntary or involuntary, of Intermedia,
     holders of Common Stock are entitled to receive pro rata all assets
     available for distribution to stockholders after payment or provision for
     payment of the debts and other liabilities of Intermedia and the
     liquidation preferences of any then outstanding Preferred Stock. There are
     no preemptive or other subscription rights, conversion rights, or
     redemption or sinking fund provisions with respect to shares of Common
     Stock. All outstanding shares of Common Stock are, and all shares of Common
     Stock to be outstanding upon exercise of the Public Warrants and conversion
     of the Depositary Shares or shares of Series D Preferred Stock or Series E
     Preferred Stock will be, fully paid and non-assessable.

                                       26
<PAGE>
 
     PREFERRED STOCK

          The Preferred Stock may be issued at any time or from time to time in
     one or more series with such designations, powers, preferences, rights,
     qualifications, limitations and restrictions (including dividend,
     conversion and voting rights) as may be fixed by the Board, without any
     further vote or action by the stockholders.

          The following is a description of certain general terms and provisions
     of the Preferred Stock.  The particular terms of any series of Preferred
     Stock will be described in the applicable Prospectus Supplement.  If so
     indicated in a Prospectus Supplement, the terms of any such series may
     differ from the terms set forth below.

          The Preferred Stock offered hereby will, upon issuance and full
     payment of the purchase price therefor, be fully paid and nonassessable and
     will not have, or be subject to, any preemptive or similar rights.

          Reference is made to the Prospectus Supplement relating to the series
     of Preferred Stock being offered for the specific terms thereof, including:
     (i) the title and stated value of such Preferred Stock; (ii) the number of
     shares of such Preferred Stock offered, the liquidation preference per
     share and the purchase price of such Preferred Stock; (iii) the dividend
     rate(s), period(s) and/or payment date(s) or method(s) of calculation
     thereof applicable to such Preferred Stock; (iv) whether dividends shall be
     cumulative or non-cumulative and, if cumulative, the date from which
     dividends on such Preferred Stock shall accumulate; (v) the procedures for
     any auction and remarketing, if any, for such Preferred Stock; (vi) the
     provisions for a sinking fund, if any, for such Preferred Stock; (vii) the
     provisions for redemption, if applicable, of such Preferred Stock; (viii)
     any listing of such Preferred Stock on any securities exchange; (ix) the
     terms and conditions, if applicable, upon which such Preferred Stock will
     be convertible into Common Stock or any other security, including the
     conversion price (or manner of calculation thereof) and conversion period;
     (x) voting rights, if any, of such Preferred Stock; (xi) a discussion of
     any material and/or special Federal income tax considerations applicable to
     such Preferred Stock; (xii) the relative ranking and preferences of such
     Preferred Stock as to dividend rights and rights upon liquidation,
     dissolution or winding up of the affairs of the Company; (xiii) any
     limitations on issuance of any series of Preferred Stock ranking senior to
     or on a parity with such series of Preferred Stock as to dividend rights
     and rights upon liquidation, dissolution or winding up of the affairs of
     the Company, and (xiv) any other specific terms, preferences, rights,
     limitations or restrictions of such Preferred Stock.

     DEPOSITARY SHARES

          General.  The following summary is qualified in its entirety by
     reference to the applicable Deposit Agreement or form of Depositary
     Receipt.  The Company may, at its option, elect to offer fractional shares
     or some multiple of shares of Preferred Stock, rather than individual
     shares of Preferred Stock.  In the event such option is exercised, the
     Company will issue receipts for Depositary Shares, each of which will
     represent a fraction or a multiple (to be set forth in the Prospectus
     Supplement relating to a particular series of offered Preferred Stock) of a
     share of a particular series of offered Preferred Stock as described below.

          The shares of any series of offered Preferred Stock represented by
     Depositary Shares will be deposited under a Deposit Agreement (the "Deposit
     Agreement") among the Company, a depositary agent to be determined by the
     Company, as depositary (the "Preferred Stock Depositary"), and the holders
     from time to time of depositary receipts issued thereunder.  Subject to the
     terms of the Deposit Agreement, each holder of a Depositary Share will be
     entitled, in proportion to the applicable fraction or multiple of a share
     of Preferred Stock represented by such Depositary Share, to all the rights
     and preferences of the Preferred Stock represented thereby (including
     dividend, voting and liquidation rights).

                                       27
<PAGE>
 
          The Depositary Shares will be evidenced by depositary receipts issued
     pursuant to the Deposit Agreement ("Depositary Receipts").  Depositary
     Receipts will be distributed to those persons purchasing the fractional or
     multiple shares of the related series of Preferred Stock.  Immediately
     following the issuance of shares of a series of Preferred Stock by the
     Company, the Company will deposit such shares with the Preferred Stock
     Depositary, which will then issue and deliver the Depositary Receipts to
     the purchasers thereof. Depositary Receipts will only be issued evidencing
     whole Depositary Shares.  A Depositary Receipt may evidence any number of
     whole Depositary Shares.

          Pending the preparation of definitive engraved Depositary Receipts,
     the Preferred Stock Depositary may, upon the written order of the Company,
     issue temporary Depositary Receipts substantially identical to (and
     entitling the holders thereof to all the rights pertaining to) the
     definitive Depositary Receipts but not in definitive form.  Definitive
     Depositary Receipts will be prepared thereafter without unreasonable delay,
     and such temporary Depositary Receipts will be exchangeable for definitive
     Depositary Receipts at the Company's expense.

          Dividends and Other Distributions.  The Preferred Stock Depositary
     will distribute all cash dividends or other cash distributions received in
     respect of the related series of Preferred Stock to the record holders of
     Depositary Shares relating to such series of Preferred Stock in proportion
     to the number of such Depositary Shares owned by such holders.

          In the event of a distribution other than in cash, the Preferred Stock
     Depositary will distribute property received by it to the record holders of
     Depositary Shares entitled thereto in proportion to the number of
     Depositary Shares owned by such holders, unless the Preferred Stock
     Depositary determines that such distribution cannot be made proportionately
     among such holders or that it is not feasible to make such distribution, in
     which case the Preferred Stock Depositary may, with the approval of the
     Company, sell such property and distribute the net proceeds from such sale
     to such holders in proportion to the number of Depositary Shares owned by
     such holders.

          The amount distributed in any of the foregoing cases will be reduced
     by any amounts required to be withheld by the Company or the Preferred
     Stock Depositary on account of taxes or other governmental charges.

          Withdrawal of Stock.  Upon surrender of the Depositary Receipts at the
     corporate trust office of the Preferred Stock Depositary and upon payment
     of the taxes, charges and fees provided for in the Deposit Agreement and
     subject to the terms thereof, the holder of the Depositary Shares evidenced
     thereby is entitled to delivery at such office, to or upon his or her
     order, of the number of whole shares of the related series of Preferred
     Stock and any money or other property, if any, represented by such
     Depositary Shares.  Holders of Depositary Shares will be entitled to
     receive whole shares of the related series of Preferred Stock, but holders
     of such whole shares of Preferred Stock will not thereafter be entitled to
     deposit such shares of Preferred Stock with the Preferred Stock Depositary
     or 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 whole shares of
     the related series of Preferred Stock to be withdrawn, the Preferred Stock
     Depositary will deliver to such holder, or upon his or her order, at the
     same time a new Depositary Receipt evidencing such excess number of
     Depositary Shares.

          Voting the Preferred Stock.  Upon receipt of notice of any meeting at
     which the holders of any series of the Preferred Stock are entitled to
     vote, the Preferred Stock Depositary will mail the information contained in
     such notice of meeting to the record holders of the Depositary Shares
     relating to such series of Preferred Stock. Each record holder of such
     Depositary Shares on the record date (which will be the same date as the
     record date for the related series of Preferred Stock) will be entitled to
     instruct the Preferred Stock Depositary as to the exercise of the voting
     rights pertaining to the number of shares of the series of Preferred Stock
     represented by such holder's Depositary Shares.  The Preferred Stock
     Depositary will endeavor, insofar as practicable, to vote or cause to be
     voted the number of shares of the Preferred Stock represented by such
     Depositary Shares in

                                       28
<PAGE>
 
     accordance with such instructions, provided the Preferred Stock Depositary
     receives such instructions sufficiently in advance of such meeting to
     enable it to so vote or cause to be voted the shares of Preferred Stock,
     and the Company will agree to take all reasonable action that may be deemed
     necessary by the Preferred Stock Depositary in order to enable the
     Preferred Stock Depositary to do so.  The Preferred Stock Depositary will
     abstain from voting shares of the Preferred Stock to the extent it does not
     receive specific instructions from the holders of Depositary Shares
     representing such Preferred Stock.

          Redemption of Depositary Shares.  If a series of the Preferred Stock
     underlying the Depositary Shares is subject to redemption, the Depositary
     Shares will be redeemed from the proceeds received by the Preferred Stock
     Depositary resulting from any redemption, in whole or in part, of such
     series of the Preferred stock held by the Preferred Stock Depositary.  The
     redemption price per Depositary Share will be equal to the applicable
     fraction or multiple of the redemption price per share payable with respect
     to such series of the Preferred Stock.  If the Company redeems shares of a
     series of Preferred Stock held by the Preferred Stock Depositary, the
     Preferred Stock Depositary will redeem as of the same redemption date the
     number of Depositary Shares representing the shares of Preferred Stock so
     redeemed.  If less than all the Depositary Shares are to be redeemed, the
     Depositary Shares to be redeemed will be selected by lot or substantially
     equivalent method determined by the Preferred Stock Depositary.

          After the date fixed for redemption, the Depositary Shares so called
     for redemption will no longer be deemed to be outstanding and all rights of
     the holders of the Depositary Shares will cease, except the right to
     receive the moneys payable upon such redemption and any money or other
     property to which the holders of such Depositary Shares were entitled upon
     such redemption, upon surrender to the Preferred Stock Depositary of the
     Depositary Receipts evidencing such Depositary Shares.  Any funds deposited
     by the Preferred Stock Depositary for any Depositary Shares that the
     holders thereof fail to redeem will be returned to the Company after a
     period of two years from the date such funds are so deposited.

          Amendment and Termination of the Deposit Agreement.  The form of
     Depositary Receipt evidencing the Depositary Shares and any provision of
     the Deposit Agreement may at any time and from time to time be amended by
     the Company and the Preferred Stock Depositary.  However, any amendment
     that materially and adversely alters the rights of the holders of
     Depositary Shares will not be effective unless such amendment has been
     approved by the holders of at least a majority of the Depositary Shares
     then outstanding.  Notwithstanding the foregoing, in no event may any
     amendment impair the right of any holder of any Depositary Shares, upon
     surrender of the Depositary Receipts evidencing such Depositary Shares and
     subject to any conditions specified in the Deposit Agreement, to receive
     shares of the related series of Preferred Stock and any money or other
     property represented thereby, except in order to comply with mandatory
     provisions of applicable law.  The Deposit Agreement may be terminated by
     the Company at any time upon not less than 60 days' prior written notice to
     the Preferred Stock Depositary, in which case, on a date that is not later
     than 30 days after the date of such notice, the Preferred Stock Depositary
     shall deliver or make available for delivery to holders of Depositary
     Shares, upon surrender of the Depositary Receipts evidencing such
     Depositary Shares, such number of whole or fractional shares of the related
     series of Preferred Stock as are represented by such Depositary Shares.
     The Deposit Agreement shall automatically terminate after there has been a
     final distribution in respect of the related series of Preferred Stock in
     connection with any liquidation, dissolution or winding up of the Company
     and such distribution has been distributed to the holders of Depositary
     Shares.

          Charges of Preferred Stock Depositary.  The Company will pay all
     transfer and other taxes and governmental charges arising solely from the
     existence of the depositary arrangements.  The Company will pay charges of
     the Preferred Stock Depositary, including charges in connection with the
     initial deposit of the related series of Preferred Stock and the initial
     issuance of the Depositary Shares and all withdrawals of shares of the
     related series of Preferred Stock, except that holders of Depositary Shares
     will pay other transfer and other taxes and governmental charges and such
     other charges as are expressly provided in the Deposit Agreement to be for
     their accounts.

                                       29
<PAGE>
 
          Miscellaneous.  The Preferred Stock Depositary will forward to the
     holders of Depositary Shares all reports and communications from the
     Company that are delivered to the Preferred Stock Depositary and which the
     Company is required to furnish to the holders of the Preferred Stock.

          Neither the Preferred Stock Depositary nor the Company will be liable
     if it is prevented or delayed by law or any circumstance beyond its control
     in performing its obligations under the Deposit Agreement.  The obligations
     of the Company and the Preferred Stock Depositary under the Deposit
     Agreement will be limited to performance with best judgment and in good
     faith of their duties thereunder, except that they are liable for
     negligence and willful misconduct in the performance of their duties
     thereunder, and they will not be obligated to appear in, prosecute or
     defend any legal proceeding in respect of any Depositary Receipts,
     Depositary Shares or series of Preferred Stock unless satisfactory
     indemnity is furnished.  The Preferred Stock Depositary and the Company may
     rely on advice of legal counsel or accountants of their choice, or
     information provided by persons presenting Preferred Stock for deposit,
     holders of Depositary Shares or other persons believed in good faith to be
     competent and on documents believed to be genuine.

          The Preferred Stock Depositary's corporate trust office is currently
     located at 2 Broadway, New York, New York 10004.  The Preferred Stock
     Depositary will act as transfer agent and registrar for Depositary Receipts
     and if shares of a series of Preferred Stock are redeemable, the Preferred
     Stock Depositary will act as redemption agent for the corresponding
     Depositary Receipts.

          Resignation and Removal of Preferred Stock Depositary.  The Preferred
     Stock Depositary may resign at any time by delivering to the Company
     written notice of its election to do so, and the Company may at any time
     remove the Preferred Stock Depositary, any such resignation or removal to
     take effect upon the appointment of a successor Preferred Stock Depositary,
     which successor Preferred Stock 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.

     SERIES B PREFERRED STOCK

          As of November 30, 1997, the Company had outstanding 323,499.1404
     shares of Series B Preferred Stock (aggregate liquidation preference of
     approximately $323.5 million). Dividends on the Series B Preferred Stock
     accumulate at a rate of 13 1/2% of the aggregate liquidation preference
     thereof and are payable quarterly, in arrears. Dividends are payable in
     cash or, at the Company's option, by the issuance of additional Series B
     Preferred Stock having an aggregate liquidation preference equal to the
     amount of such dividends. The Series B Preferred Stock is subject to
     mandatory redemption at a liquidation preference of $1,000 per share, plus
     accumulated and unpaid dividends on March 31, 2009. The Series B Preferred
     Stock will be redeemable at the option of the Company at any time after
     March 31, 2002 at rates commencing with 106.75%, declining to 100% on March
     31, 2007. The Series B Certificate of Designation contains certain
     covenants that, among other things, limit the ability of the Company and
     its subsidiaries to make certain restricted payments, incur additional
     indebtedness and issue additional preferred stock, pay dividends or make
     other distributions, repurchase equity interests, conduct certain lines of
     business or enter into certain mergers and consolidations. In the event of
     a change of control of the Company, holders of the Series B Preferred Stock
     have the right to require the Company to purchase their shares of Series B
     Preferred Stock at a price equal to 101% of the aggregate liquidation
     preference with respect thereto, plus accumulated and unpaid dividends, if
     any, to the date of purchase. This description is intended as a summary and
     is qualified in its entirety by reference to the Series B Certificate of
     Designation.

          The Company may, at its option, exchange some or all of the Series B
     Preferred Stock for the Company's 13 1/2% Senior Subordinated Debentures,
     due 2009 (the "Exchange Debentures"). The Exchange Debentures would  mature
     on March 31, 2009. Interest on the Exchange Debentures would be payable
     semi-annually, and could be paid in the form of additional Exchange
     Debentures at the Company's option.

                                       30
<PAGE>
 
     Exchange Debentures would be redeemable by the Company at any time after
     March 31, 2002 at rates commencing with 106.75%, declining to 100% on March
     31, 2007. The Exchange Debentures contain covenants similar to those
     contained in the Indenture.

     SERIES D PREFERRED STOCK

          As of November 30, 1997, the Company had outstanding 69,000 shares of
     Series D Preferred Stock (aggregate liquidation preference approximately
     $172.5 million).  Dividends on the Series D Preferred Stock accumulate at a
     rate of 7% of the aggregate liquidation preference thereof and are payable
     quarterly, in arrears, on each January 15, April 15, July 15 and October
     15.  Dividends are payable in cash or, at the Company's option, by the
     issuance of shares of Common Stock.  The Series D Preferred Stock will be
     redeemable at the option of the Company at any time on or after July 19,
     2000 at rates commencing with 104%, declining to 100% on July 19, 2004.
     The Series D Preferred Stock is convertible (since October 7, 1997), at the
     option of the holder, into Common Stock at a conversion price of $38.90 per
     share of Common Stock, subject to certain adjustments.  In the event of a
     change of control of the Company, holders of the Series D Preferred Stock
     have the right to require the Company to purchase their shares of Series D
     Preferred Stock at a price equal to 100% of the aggregate liquidation
     preference with respect thereto, plus accumulated and unpaid dividends and
     preferred stock liquidated damages, if any, to the date of purchase,
     subject to the restrictions on such repurchase contained in the Series B
     Preferred Stock Certificate of Designation and the outstanding indebtedness
     of the Company. This description is intended as a summary and is qualified
     in its entirety by reference to the Series D Certificate of Designation.

     SERIES E PREFERRED STOCK

          As of November 30, 1997, the Company had outstanding 80,000 shares of
     Series E Preferred Stock (aggregate liquidation preference approximately
     $200,000,000 million).  Dividends on the Series E Preferred Stock
     accumulate at a rate of 7% of the aggregate liquidation preference thereof
     and are payable quarterly, in arrears, on each January 15, April 15, July
     15 and October 15.  Dividends are payable in cash or, at the Company's
     option, by the issuance of shares of Common Stock.  The Series E Preferred
     Stock will be redeemable at the option of the Company at any time on or
     after October 18, 2000 at rates commencing with 104%, declining to 100% on
     October 18, 2004.  The Series E Preferred Stock is convertible (since
     December 29, 1997), at the option of the holder, into Common Stock at a
     conversion price of $60.47 per share of Common Stock, subject to certain
     adjustments. In the event of a change of control of the Company, holders of
     the Series E Preferred Stock have the right to require the Company to
     purchase their shares of Series E Preferred Stock at a price equal to 100%
     of the aggregate liquidation preference with respect thereto, plus
     accumulated and unpaid dividends and preferred stock liquidated damages, if
     any, to the date of purchase, subject to the restrictions on such
     repurchase contained in the Series B Preferred Stock Certificate of
     Designation and the outstanding indebtedness of the Company. This
     description is intended as a summary and is qualified in its entirety by
     reference to the Series E Certificate of Designation.

     DEPOSITARY SHARES

          As of November 30, 1997, all of the outstanding shares of Series D
     Preferred Stock and Series E Preferred Stock were held in the form of
     Depository Shares, each of which represents a one-hundredth interest in a
     share of Series D Preferred Stock or Series E Preferred Stock. Each owner
     of a Depositary Share is entitled proportionately to all of the rights and
     preferences of the shares of Series D Preferred Stock or Series E Preferred
     Stock represented thereby (including dividend, voting, redemption and
     liquidation rights) contained in the Company's Certificate of Incorporation
     and the Certificate of Designations and summarized above.

     DELAWARE LAW AND CERTAIN PROVISIONS OF INTERMEDIA'S CERTIFICATE OF
     INCORPORATION AND BYLAWS

                                       31

<PAGE>
 
          General. The Certificate of Incorporation and the Bylaws of Intermedia
     contain certain provisions that could make more difficult the acquisition
     of Intermedia by means of a tender offer, a proxy contest or otherwise.
     These provisions are expected to discourage certain types of coercive
     takeover practices and inadequate takeover bids and to encourage persons
     seeking to acquire control of Intermedia first to negotiate with
     Intermedia. Although such provisions may have the effect of delaying,
     deferring or preventing a change in control of Intermedia, the Company
     believes that the benefits of increased protection of Intermedia's
     potential ability to negotiate with the proponent of an unfriendly or
     unsolicited proposal to acquire or restructure the Company outweigh the
     disadvantages of discouraging such proposals because, among other things,
     negotiation of such proposals could result in an improvement of their
     terms. The description set forth below is intended as a summary only and is
     qualified in its entirety by reference to the Certificate of Incorporation
     and Bylaws of Intermedia.

          Board of Directors. Intermedia's Certificate of Incorporation provides
     that (i) the Board be divided into three classes of directors, with each
     class having a number as nearly equal as possible and with the term of each
     class expiring in a different year and (ii) the Board shall consist of not
     less than three nor more than seven members, the exact number to be
     determined from time to time by the Board. The Board has set the number of
     directors at four. Subject to any rights of holders of Preferred Stock, a
     majority of the Board then in office will have the sole authority to fill
     any vacancies on the Board. Stockholders can remove members of the Board
     only for cause.

          Stockholder Action and Special Meetings. Intermedia's Certificate of
     Incorporation provides that (i) any action required or permitted to be
     taken by Intermedia's stockholders must be effected at a duly called annual
     or special meeting of Stockholders and may not be effected by any consent
     in writing and (ii) the authorized number of directors may be changed only
     by resolution of the Board. The Company's Bylaws provide that, subject to
     any rights of holders of any series of Preferred Stock, special meetings of
     stockholders may be called only by the Chairman of the Board or the
     President of Intermedia, by a majority of the Board or by stockholders
     owning shares representing at least a majority of the capital stock of
     Intermedia issued and outstanding and entitled to vote.

          Stockholder's Rights Plan. Intermedia's Board of Directors has adopted
     a Stockholder's Rights Plan, pursuant to which rights to acquire the
     Company's Series C Preferred Stock, exercisable upon the occurrence of
     certain events, including the acquisition by a person or group of a
     specified percentage of the Common Stock, were distributed to its
     stockholders.

          Anti-Takeover Statute. Subject to certain exceptions, Section 203 of
     the DGCL prohibits a publicly held Delaware corporation, such as
     Intermedia, from engaging in any "business combination" with an "interested
     stockholder" for a three-year period following the date on which such
     person became an interested stockholder, unless (i) prior to such date, the
     board of directors of the corporation approved either such business
     combination or the transaction that resulted in such person becoming an
     interested stockholder, (ii) upon consummation of the transaction that
     resulted in such person becoming an interested stockholder, such person
     owned at least 85% of the voting stock of the corporation outstanding
     immediately prior to such transaction (excluding certain shares) or (iii)
     on or subsequent to such date, such business combination is approved by the
     board of directors of the corporation and by the affirmative vote of at
     least 66 2/3% of the outstanding voting stock that is not 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 essentially a person
     who, together with affiliates and associates, owns (or within the past
     three years has owned) 15% or more of the corporation's voting stock. It is
     anticipated that the provisions of Section 203 of the DGCL may encourage
     any person interested in acquiring Intermedia to negotiate in advance with
     the Board since the stockholder approval requirement would be avoided if a
     majority of Intermedia's directors then in office approved either the
     business combination or the transaction that resulted in such person
     becoming an interested stockholder.

                                       32
<PAGE>
 
     DIVIDEND RESTRICTIONS

          The terms of the Existing Indentures restrict the Company's ability to
     pay cash dividends on the Series B Preferred Stock.  The Existing
     Indentures and the Series B Certificate of Designation restrict
     Intermedia's ability to pay cash dividends on the Common Stock, the Series
     D Preferred Stock and the Series E Preferred Stock.

     TRANSFER AGENT AND REGISTRAR

          The transfer agent and registrar for the Common Stock, Series B
     Preferred Stock, the Series D Preferred Stock and the Series E Preferred
     Stock is Continental Stock Transfer & Trust Company.

     OUTSTANDING WARRANTS

          160,000 warrants (the "Public Warrants"), each to purchase 2.19 shares
     of Common Stock, at an exercise price of $10.86 per share (subject to anti-
     dilution adjustments) were issued as part of a June 1995 private placement.
     The Public Warrants are currently exercisable. Unless exercised, the Public
     Warrants will expire on June 1, 2000.

          Ralph J. Sutcliffe, a partner of Kronish, Lieb, Weiner & Hellman LLP,
     owns a warrant to purchase 100,000 shares of Common Stock at an exercise
     price of $41.50 per share.

          On January 13, 1998, the warrant owned by Current Science Group, Inc.,
     formerly known as Electronic Press Services Inc was exercised pursuant to a
     cashless exercise provision for 53,172 shares of Common Stock.

     RESERVATION OF SHARES

          The Company has authorized and reserved for issuance such number of
     Common Shares as will be issuable upon the exercise of all warrants and the
     conversion of all Depositary Shares (or all shares of the Series D
     Preferred Stock and Series E Preferred Stock).  Such Common Shares, when
     issued, will be duly and validly issued, fully paid and non-assessable,
     free of preemptive rights and free from all taxes, liens, charges and
     security interests with respect to the issue thereof.

     REGISTRATION RIGHTS

          The Company is a party to several agreements pursuant to which certain
     stockholders have the right, among other matters, to require the Company to
     register their shares of Common Stock under the Securities Act under
     certain circumstances. As a result, substantially all of the Company's
     outstanding shares, other than those held by affiliates, are transferable
     without restriction under the Securities Act.

                                       33

<PAGE>
 
                              PLAN OF DISTRIBUTION
    
          The Company or Intermedia Capital, as the case may be, may sell the
     Securities or Common Stock, respectively, offered hereby (1) through
     underwriters or dealers; (2) through agents; (3) directly to purchasers, or
     (4) through a combination of any such methods of sale. For purposes of this
     Registration Statement, Intermedia Capital and any such underwriter, dealer
     or agent who participate in the distribution of any of the Securities may
     be deemed to be "underwriters", and any profits on the sale of Securities
     by them and any discounts, commissions, or concessions received by any such
     underwriter, dealer, or agent might be deemed to be underwriting discounts
     and commissions under the Securities Act. Further, to the extent Intermedia
     Capital may be deemed to be an underwriter, Intermedia Capital may be
     subject to certain statutory liabilites of the Securities Act, including,
     but not limited to, Sections 11, 12 and 17 of the Secutities Act and Rule
     10b-5 under the Exchange Act. Any such underwriter, dealer or agent may be
     deemed to be an underwriter within the meaning of the Securities Act.      
         
        The Prospectus Supplement relating to the Securities will set forth
     their offering terms, including the name or names of any underwriters,
     dealers or agents, the purchase price of the Securities and the proceeds to
     the Company or Intermedia Capital, as the case may be, from such sale, any
     underwriting discounts, commissions and other items constituting
     compensation to underwriters, dealers or agents, any initial public
     offering price, any discounts or concessions allowed or reallowed or paid
     by underwriters or dealers to other dealers, and any securities exchanges
     on which the Securities may be listed.     

          If underwriters or dealers are used in the sale, the Securities will
     be acquired by the underwriters or dealers for their own account and may be
     resold from time to time in one or more transactions, at a fixed price or
     prices, which may be changed, or at market prices prevailing at the time of
     sale, or at prices related to such prevailing market prices, or at
     negotiated prices.  The Securities may be offered to the public either
     through underwriting syndicates represented by one or more managing
     underwriters or directly by one or more of such firms.  Unless otherwise
     set forth in the Prospectus Supplement, the obligations of underwriters or
     dealers to purchase the Securities will be subject to certain conditions
     precedent and the underwriters or dealers will be obligated to purchase all
     the Securities if any are purchased.  Any initial public offering price and
     any discounts or concessions allowed or reallowed or paid by underwriters
     or dealers to other dealers may be changed from time to time.

          Securities may be sold directly by the Company or Intermedia Capital,
     or through agents designated by the Company or Intermedia Capital from time
     to time. Any agent involved in the offer or sale of the Securities in
     respect of which this Prospectus is delivered will be named, and any
     commissions payable by the Company or Intermedia Capital to such agent will
     be set forth, in the Prospectus Supplement. Unless otherwise indicated in
     the Prospectus Supplement, any such agent will be acting on a best efforts
     basis for the period of its appointment.         
          If so indicated in the Prospectus Supplement, the Company or
     Intermedia Capital, will authorize underwriters, dealers or agents to
     solicit offers by certain specified institutions to purchase Securities
     from the Company or Intermedia Capital, at the public offering price set
     forth in the Prospectus Supplement pursuant to delayed delivery contracts
     providing for payment and delivery on a specified date in the future. Such
     contracts will be subject to any conditions set forth in the Prospectus
     Supplement and the Prospectus Supplement will set forth the commission
     payable for solicitation of such contracts. The underwriters and other
     persons soliciting such contracts will have no responsibility for the
     validity or performance of any such contracts.     
         
          Underwriters, dealers and agents may be entitled under agreements
     entered into with the Company or Intermedia Capital, to indemnification by
     the Company against certain civil liabilities, including liabilities under
     the Securities Act, or to contribution by the Company to payments they may
     be required to make in respect thereof. The terms and conditions of such
     indemnification will be described in an applicable Prospectus Supplement.
     Underwriters, dealers and agents may be customers of, engage in
     transactions with, or perform services for the Company or Intermedia
     Capital, in the ordinary course of business.     

          Each series of Securities other than Common Stock will be a new issue
     of securities with no established trading market.  Any underwriters to whom
     Securities are sold by the Company for public offering and sale may make a
     market in such Securities, but such underwriters will not be obligated to
     do so and may discontinue any market making at any time without notice.  No
     assurance can be given as to the liquidity of the trading market for any
     Securities.

                                       34
<PAGE>
 
                                 LEGAL MATTERS

          The legality of the securities offered hereby will be passed upon for
     the Company by Kronish, Lieb, Weiner & Hellman LLP, 1114 Avenue of the
     Americas, New York, New York 10036-7798 and for the underwriters, dealers
     or agents, if any, by Latham & Watkins, 885 Third Avenue, New York, New
     York 10022, unless otherwise specified in the Prospectus Supplement.  Ralph
     J. Sutcliffe, a partner of Kronish, Lieb, Weiner & Hellman LLP,
     beneficially owns 5,745 shares of the Common Stock and a warrant to
     purchase 100,000 shares of Common Stock at an exercise price of $41.50 per
     share.

                                    EXPERTS

          The consolidated financial statements and schedule of Intermedia
     Communications Inc. appearing in Intermedia Communication Inc.'s Annual
     Report (Form 10-K) for the year ended December 31, 1996, have been audited
     by Ernst & Young LLP, independent certified public accountants, as set
     forth in their report thereon included therein and incorporated herein by
     reference.  Such consolidated financial statements and schedule are
     incorporated herein by reference in reliance upon such report given upon
     the authority of such firm as experts in accounting and auditing.
 
          The consolidated financial statements of DIGEX, Incorporated,
     appearing in DIGEX, Incorporated's Annual Report (Form 10-KSB) for the year
     ended December 31, 1996, have been audited by Ernst & Young, LLP,
     independent auditors, as set forth in their report thereon included therein
     and incorporated herein by reference.  Such consolidated financial
     statements are incorporated herein by reference in reliance upon such
     report given upon the authority of such firm as experts in accounting and
     auditing.

          The December 31, 1996 audited financial statements of Shared
     Technologies Fairchild Inc. incorporated by reference in this Prospectus
     and elsewhere in the Registration Statement have been audited by Arthur
     Andersen LLP, independent public accountants, as indicated in their report
     with respect thereto, and are included herein in reliance upon the
     authority of said firm as experts in giving said report.

          The consolidated financial statements and schedule of Shared
     Technologies Fairchild Inc. and subsidiaries at December 31, 1995 and for
     each of the two years in the period ended December 31, 1995 incorporated by
     reference in this Prospectus have been audited by Rothstein, Kass &
     Company, P.C., independent certified public accountants, as indicated in
     their report, which includes an explanatory paragraph relating to the
     changing of the method of accounting for its investment in one of its
     subsidiaries, with respect thereto, and are incorporated by reference
     herein in reliance upon the authority of said firm as experts in accounting
     and auditing.

                                       35
<PAGE>
 
                                    PART II

                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

     ITEM 14.  Other Expenses of Issuance and Distribution.

          The following statement sets forth the expenses payable in connection
     with this Registration Statement (estimated except for the registration
     fee), all of which will be borne by the Company:

     Securities and Exchange Commission filing fee................  $147,500.00
     Legal fees and expenses......................................  $100,000.00
     Accountant's fees and expenses...............................  $ 14,000.00
     Miscellaneous................................................  $  8,500.00

     Total........................................................  $270,000.00

     ITEM 15.  Indemnification of Directors and Officers.

          The Company's Certificate of Incorporation provides that the Company
     will to the fullest extent permitted by the General Corporation Law of the
     State of Delaware (the "GCL"), as amended from time to time, indemnify all
     persons whom it may indemnify pursuant thereto.  The Company's By-laws
     contain a similar provision requiring indemnification of the Company's
     directors and officers to the fullest extent authorized by the GCL.  The
     GCL permits a corporation to indemnify its directors and officers (among
     others) against expenses (including attorneys' fees), judgments, fines and
     amounts paid in settlement actually and reasonably incurred by them in
     connection with any action, suit or proceeding brought (or threatened to be
     brought) by third parties, if such directors or officers acted in good
     faith and in a manner they reasonably believed to be in or not opposed to
     the best interests of the corporation and, with respect to any criminal
     action or proceeding, had no reasonable cause to believe their conduct was
     unlawful.  In a derivative action, i.e., one by or in the right of the
     corporation, indemnification may be made for expenses (including attorneys'
     fees) actually and reasonably incurred by directors and officers in
     connection with the defense or settlement of such action if they had acted
     in good faith and in a manner they reasonably believed to be in or not
     opposed to the best interests of the corporation, except that no
     indemnification shall be made in respect of any claim, issue or matter as
     to which such person shall have been adjudged liable to the Company unless
     and only to the extent that the Court of Chancery or the court in which
     such action or suit was brought shall determine upon application that,
     despite the adjudication of liability but in view of all the circumstances
     of the case, such person is fairly and reasonably entitled to indemnity for
     such expenses.  The GCL further provides that, to the extent any director
     or officer has been successful on the merits or otherwise in defense of any
     action, suit or proceeding referred to in this paragraph, or in defense of
     any claim, issue or matter therein, such person shall be indemnified
     against expenses (including attorneys' fees) actually and reasonably
     incurred by him in connection therewith.  In addition, the Company's
     Certificate of Incorporation contains a provision limiting the personal
     liability of the Company's directors for monetary damages for certain
     breaches of their fiduciary duty.  The Company has indemnification
     insurance under which directors and officers are insured against certain
     liability that may occur in their capacity as such.

                                      II-1
<PAGE>
 
     ITEM 16.  Exhibits.

     2.1   --  Agreement and Plan of Merger, dated as of June 4, 1997, among the
               Company, Daylight Acquisition Corp. and DIGEX, Incorporated.
               Exhibit 99(c)(1) to the Company's Schedule 14D-1 filed with the
               Commission on June 11, 1997 is incorporated herein by reference.

     2.2   --  Agreement and Plan of Merger, dated as of November 20, 1997, by
               and among the Company, Moonlight Acquisition Corp. and Shared
               Technologies Fairchild Inc. Exhibit 99(c)(1) to the Company's
               Schedule 14D-1 and Schedule 13D filed with the Commission on
               November 26, 1997 is incorporated herein by reference.

     2.3   --  Acquisition Agreement, dated as of December 17, 1997, among the
               Company and the holders of interest in the Long Distance Savers
               companies. Exhibit 2.3 to the Company's S-3 Registration
               Statement filed with the Commission on January 14, 1998 is
               incorporated herein by reference.
    
    *4.1   --  Form of Senior Indenture between Intermedia Communications Inc.
               and the Trustee.     
    
    *4.2   --  Form of Subordinated Indenture between Intermedia Communications
               Inc. and the Trustee.     
    
    *5.1   --  Opinion of Kronish, Lieb, Weiner & Hellman LLP re: legality of
               securities offered hereby.     
    
    *12.1  --  Statement Re: Computation of Ratios.     
     
    *23.1  --  Consent of Kronish, Lieb, Weiner & Hellman LLP is contained in
               their opinion filed as Exhibit 5.1 to this Registration
               Statement.     
                    
   **23.2  --  Consent of Ernst & Young LLP.     
     
   **23.3  --  Consent of Ernst & Young LLP.     
     
   **23.4  --  Consent of Arthur Andersen LLP.     
     
   **23.5  --  Consent of  Rothstein, Kass & Company, P.C.     
     
    *24.1  --  Power of Attorney is set forth on the signature page of this
               Registration Statement.     
    
 *Filed with the Registration Statement of January 27, 1998.     
    
**Filed herewith.     

     
        ITEM 17.  Undertakings.

              The undersigned registrant hereby undertakes:

        (1)  To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:

               (i)  To include any prospectus required by Section 10(a)(3) of
     the Securities Act;

               (ii) To reflect in the Prospectus any facts or events arising
     after the effective date of this Registration Statement (or the most recent
     post-effective amendment thereof) which, individually or in the aggregate,
     represent a fundamental change in the information set forth in this
     Registration Statement.

                                      II-2

<PAGE>
 
     Notwithstanding the foregoing, any increase or decrease in the volume of
     securities offered (if the total dollar value of securities offered would
     not exceed that which was registered) and any deviation from the low or
     high end of the estimated maximum offering range may be reflected in the
     form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
     the aggregate, the changes in volume and price represent no more than a 20
     percent change in the maximum aggregate offering price set forth in the
     "Calculation of Registration Fee" table in the effective registration
     statement;

               (iii) To include any material information with respect to the
     plan of distribution not previously disclosed in this Registration
     Statement or any material change to such information in this Registration
     Statement;

     provided, however, that paragraphs (i) and (ii) above do not apply if the
     information required to be included in a post-effective amendment by those
     paragraphs is contained in periodic reports filed with or furnished to the
     Commission by the Company pursuant to Section 13 or Section 15(d) of the
     Exchange Act that are incorporated by reference in this Registration
     Statement.

               (2) That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new registration statement relating to the securities offered therein, and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.

               (3) To remove from registration by means of a post-effective
     amendment any of the securities being registered which remain unsold at the
     termination of the offering.

               (4) That, for purposes of determining any liability under the
     Securities Act, each filing of the registrant's annual report pursuant to
     Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
     each filing of an employee benefit plan's annual report pursuant to Section
     15(d) of the Exchange Act) that is incorporated by reference in this
     Registration Statement shall be deemed to be a new registration statement
     relating to the securities offered therein, and the offering of such
     securities at that time shall be deemed to be the initial bona fide
     offering thereof.

               Insofar as indemnification for liabilities arising under the
     Securities Act may be permitted to directors, officers and controlling
     persons of the registrant pursuant to the foregoing provisions, or
     otherwise, the registrant has been advised that in the opinion of the
     Securities and Exchange Commission such indemnification is against public
     policy as expressed in the Securities Act and is, therefore, unenforceable.
     In the event that a claim for indemnification against such liabilities
     (other than the payment by registrant of expenses incurred or paid by a
     director, officer or controlling person of the registrant in the successful
     defense of any action, suit or proceeding) is asserted by such director,
     officer or controlling person in connection with the securities being
     registered, the registrant will, unless in the opinion of its counsel the
     matter has been settled by controlling precedent, submit to a court of
     appropriate jurisdiction the question whether such indemnification by it is
     against public policy as expressed in the Securities Act and will be
     governed by the final adjudication of such issue.

                                      II-3
<PAGE>
 
                                   SIGNATURES
    
        Pursuant to the requirements of the Securities Act of 1933, the
     Registrant certifies that it has reasonable grounds to believe that it
     meets all of the requirements for filing on Form S-3 and has duly caused
     this Amendment No. 1 to the Registration Statement to be signed on its
     behalf by the undersigned, thereunto duly authorized, in the City of Tampa,
     State of Florida, on this 12th day of February, 1998.     


                                         INTERMEDIA COMMUNICATIONS INC.


                                         By:  /s/ Robert M. Manning
                                             --------------------------
                                             Robert M. Manning,
                                             Chief Financial Officer and
                                             Senior Vice President
    
        Pursuant to the requirements of the Securities Act of 1933, this
     Amendment No. 1 to the Registration Statement has been signed below by the
     following persons in the capacities and on the dates indicated.      

    
<TABLE>
<CAPTION>
                  SIGNATURE                                TITLE                  DATE
- ----------------------------------------------  ---------------------------  --------------
<S>                                             <C>                          <C>
Principal Executive Officers:
 

             /s/     *                            Chairman of the Board,     February 12, 1998 
- ----------------------------------------------     President and Chief                      
               David C. Ruberg                      Executive Officer                        

 
Principal Financial and Accounting Officers:
 

             /s/  Robert M. Manning               Chief Financial Officer    February 12, 1998 
- ----------------------------------------------              and                             
              Robert M. Manning                   Senior Vice President                      
 

             /s/     *                            Controller and Chief       February 12, 1998 
- ----------------------------------------------      Accounting Officer
              Jeanne M. Walters


Other Directors:


             /s/     *                                   Director            February 12, 1998 
- ----------------------------------------------
                John C. Baker


             /s/     *                                   Director            February 12, 1998
- ----------------------------------------------
               George F. Knapp


             /s/     *                                   Director            February 12, 1998 
- ----------------------------------------------
              Philip A. Campbell

By:          /s/  Robert M. Manning   
- ----------------------------------------------
                Robert M. Manning 
                Attorney-in-fact
</TABLE>     

                                      II-4


<PAGE>
 
                                                                    Exhibit 23.2


              Consent of Independent Certified Public Accountants
    
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3 No. 333-45019) and related
prospectus of Intermedia Communications Inc. for the registration of
$500,000,000 of Debt Securities, Preferred Stock, Depositary Shares and Common
Stock and to the incorporation by reference therein of our report dated February
10, 1997, except for Note 13, as to which the date is March 7, 1997, with
respect to the consolidated financial statements and schedule of Intermedia
Communications Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.     

Tampa, Florida
    
February 9, 1998      


<PAGE>
 
                                                                    Exhibit 23.3


              Consent of Independent Certified Public Accountants
    
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3 No. 333-45019) and related
prospectus of Intermedia Communications Inc. for the registration of
$500,000,000 of Debt Securities, Preferred Stock, Depositary Shares and Common
Stock and to the incorporation by reference therein of our report dated February
24, 1997, with respect to the consolidated financial statements of DIGEX,
Incorporated included in its Annual Report (Form 10-KSB) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.     


Baltimore, Maryland
    
February 9, 1998      


<PAGE>
 
                                                                    Exhibit 23.4


              Consent of Independent Certified Public Accountants
          
     As independent public accountants, we hereby consent to the incorporation
     by reference in this Amendment No. 1 to Form S-3 Registration Statement of
     our report dated March 7, 1997 incorporated by reference in the Shared
     Technologies Fairchild Inc. Form 10-K for the year ended December 31, 1996
     and to all references to our Firm included in this Form S-3 Registration
     Statement.      

                                        /s/ Arthur Andersen LLP


     Washington, D.C.
         
     February 9, 1998      


<PAGE>
 
                                                                    Exhibit 23.5


              Consent of Independent Certified Public Accountants
         
     We consent to the incorporation by reference in this Amendment No. 1 to the
     Registration Statement on Form S-3 of Intermedia Communications Inc. for
     the registration of Debt Securities, Preferred Stock, Depositary Shares and
     Common Stock up to an aggregate amount of $500,000,000, of our report,
     which contains an explanatory paragraph relating to the changing of the
     method of accounting for Shared Technologies Fairchild Inc.'s investment in
     one of its subsidiaries, dated March 1, 1996, on our audits of the
     consolidated financial statements and financial statement schedule of
     Shared Technologies Fairchild Inc. as of December 31, 1995 and 1994. We
     also consent to the reference to our firm under the caption "Experts". 
          


                                        /s/ Rothstein, Kass & Company, P.C.


     Roseland, New Jersey
         
     February 9, 1998      


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