INTERMEDIA COMMUNICATIONS INC
424B3, 1998-04-03
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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                                         FILED PURSUANT TO RULE 424(b)(3) OF THE
                                         SECURITIES ACT OF 1933, AS AMENDED

                                         REGISTRATION NO. 333-46369

FINAL PROSPECTUS

                         INTERMEDIA COMMUNICATIONS INC.
                        2,679,874 Shares of Common Stock

         This Prospectus is being used in connection with the offering from time
to time by certain holders (the "Selling Securityholders") of shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), of
Intermedia Communications Inc., a Delaware corporation ("Intermedia"). The
Selling Securityholders will have acquired 2,679,874 shares of Common Stock from
Intermedia as a portion of the consideration for the acquisition by Intermedia
of the Long Distance Savers group of companies ("LDS").

         The Shares may be sold from time to time in accordance with the
transfer restrictions set forth in the LDS Merger Agreement (as defined herein)
to purchasers directly by the Selling Securityholders. Alternatively, the
Selling Securityholders may from time to time in accordance with the transfer
restrictions set forth in the LDS Merger Agreement offer the Shares through
brokers, dealers or agents who may receive compensation in amounts to be
negotiated immediately prior to the sale in the form of discounts, concessions
or commissions from the Selling Securityholders and/or the purchasers of the
Shares for whom they may act as agent. The Selling Securityholders and any such
brokers, dealers or agents who participate in the distribution of the Shares may
be deemed to be "underwriters", and any profits on the sale of the Shares by
them and any discounts, commissions or concessions received by any such brokers,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended (the "Securities Act"). To the
extent the Selling Securityholders may be deemed to be underwriters, the Selling
Securityholders 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 Selling
Securityholders and any other person participating in such distribution will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Regulation M, which may
limit the timing of purchases and sales of any of the Shares by the Selling
Securityholders and any other such person. All of the foregoing may affect the
marketability of the Shares and the ability of any person or entity to engage in
market-making activities with respect to the Shares.

         Intermedia will not receive any proceeds from the sale of the Shares.
Intermedia has agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the Shares to the public other than
commissions, fees and discounts of underwriters, brokers, dealers and agents.

         On March 30, 1998, the closing price for the Common Stock as quoted on
the National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") National Market (the "Nasdaq National Market"), under the symbol
"ICIX", was $83.4375 per share.

             PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY MATTERS
              DISCUSSED UNDER THE CAPTION "RISK FACTORS" ON PAGE 1.

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

                                      
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         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 Intermedia. Neither the 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 Intermedia since
the date hereof.

         A Registration Statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time this Registration Statement
becomes effective. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction.

                  The date of this Prospectus is April 1, 1998.


                                        2
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                              AVAILABLE INFORMATION

         Intermedia 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 Intermedia 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 this
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 Intermedia
with the Commission and are incorporated herein by reference:


         Intermedia's Annual Report on Form 10-K for the year ended December 31,
1997.

         The portions of the Proxy Statement for the Annual Meeting of
Stockholders of Intermedia to be held on May 20, 1998 that have been
incorporated by reference into Intermedia's Annual Report on Form 10-K for the
year ended December 31, 1997.


         Intermedia's Current Report on Form 8-K filed with the Commission on
January 21, 1998.

         Intermedia's Current Report on Form 8-K filed with the Commission on
February 12, 1998.

         Intermedia's Current Report on Form 8-K filed with the Commission on
March 18, 1998.

         Intermedia's Current Report on Form 8-K/A filed with the Commission on
March 30, 1998.

         The description of the capital stock contained in Intermedia'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-KSB for the year ended December
31, 1996.

         All documents subsequently filed by Intermedia 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.

         Intermedia 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.



                                       3
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                                  RISK FACTORS

         Prospective investors should consider carefully the following factors
relating to the business of Intermedia and this offering, in addition to other
information set forth elsewhere in this Prospectus and in Intermedia's Annual
Report on Form 10-K, before purchasing the Shares offered hereby.

         Limited Operations of Certain Services; History of Net Losses.
Intermedia's business commenced in 1987. Substantially all of Intermedia'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. Intermedia is expecting to substantially
increase the size of its operations in the near future. Prospective investors,
therefore, have limited historical financial information about Intermedia upon
which to base an evaluation of Intermedia's performance. Given Intermedia's
limited operating history, there is no assurance that it will be able to compete
successfully in the telecommunications business.

         The development of Intermedia's business and the expansion of its
network require significant capital, operational and administrative
expenditures, a substantial portion of which may be 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 attributable to common stockholders of
approximately $20.7 million, $57.2 million and $284.9 million for the years
ended December 31, 1995, 1996 and 1997, respectively. Intermedia expects net
losses to continue for the next several years. In addition, Intermedia had
negative EBITDA in 1996 and 1997. There can be no assurance that Intermedia will
achieve or sustain profitability and/or positive EBITDA in the future.

         Substantial Indebtedness; Insufficiency of Earnings to Cover Fixed
Charges. Intermedia is highly leveraged. At December 31, 1997, after giving pro
forma effect to the acquisitions of Shared Technologies Fairchild Inc. ("Shared
Technologies") and LDS and the pending acquisition of National
Telecommunications of Florida, Inc. and NTC, Inc. (collectively, "National"),
Intermedia would have had outstanding approximately $1.5 billion in aggregate
principal amount of indebtedness and other liabilities on a consolidated basis
(including trade payables) and approximately $688.9 million of obligations with
respect to three outstanding series of preferred stock. The degree to which
Intermedia is leveraged could have important consequences to holders of the
Common Stock, including the following: (i) a substantial portion of Intermedia's
cash flow from operations will be dedicated to payment of the principal and
interest on its indebtedness and dividends on and the redemption of outstanding
preferred stock thereby reducing funds available for other purposes; (ii)
Intermedia's significant degree of leverage could increase its vulnerability to
changes in general economic conditions or increases in prevailing interest
rates; (iii) Intermedia's ability to obtain additional financing for working
capital, capital expenditures, acquisitions, general corporate purposes or other
purposes could be impaired; and (iv) Intermedia may be more leveraged than
certain of its competitors, which may be a competitive disadvantage.





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         Intermedia's historical earnings have been insufficient to cover
combined fixed charges and dividends on preferred stock by $2.3 million, $3.3
million, $19.8 million, $60.0 million and $245.7 million for each of the years
ended December 31, 1993, 1994, 1995, 1996 and 1997, respectively. Combined fixed
charges and dividends include interest and dividends whether paid or accrued. On
a pro forma basis, after giving effect to the acquisitions of Shared
Technologies and LDS, and the pending acquisition of National and each of
Intermedia's 1997 debt and equity offerings, as if they had been consummated at
the beginning of the year, Intermedia's earnings were insufficient to cover
combined fixed charges and dividends on preferred stock by $432.7 million for
the year ended December 31, 1997. Intermedia anticipates that earnings will be
insufficient to cover fixed charges for the next several years. In order for
Intermedia to meet its debt service obligations and its dividend and redemption
obligations with respect to its outstanding preferred stock, Intermedia will
need to substantially improve its operating results. There can be no assurance
that Intermedia's operating results will be of sufficient magnitude to enable
Intermedia to meet such debt service, dividend and redemption obligations. In
the absence of such operating results, Intermedia could face substantial
liquidity problems and may 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.

         Significant Capital Requirements and Need for Additional Financing.
Expansion of Intermedia'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, credit availability and internally generated
funds. Intermedia expects that continued expansion of its business will require
raising equity and/or debt by the end of fiscal 1999. Depending on market
conditions, Intermedia 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 terms of Intermedia=s outstanding indebtedness and preferred stock
impose certain restrictions upon Intermedia's ability to incur additional
indebtedness or issue additional preferred stock. In addition, Intermedia'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 Intermedia'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.

         Lack of Dividend History. Intermedia has never declared or paid any
cash dividends on its Common Stock and does not expect to declare any such
dividends in the foreseeable future. Payment of any future dividends will depend
upon earnings and capital requirements of Intermedia, Intermedia's debt
facilities and other factors the Board of Directors considers appropriate.
Intermedia intends to retain earnings, if any, to finance the development and
expansion of its business, and therefore does not anticipate paying any
dividends in the foreseeable future. In addition, the terms of the outstanding
indebtedness and preferred stock restrict the payment of dividends on Common
Stock. Intermedia may also establish a bank credit facility which may be secured
by a substantial portion of the assets of Intermedia and would contain
additional dividend restrictions.

         Risks Associated with Acquisitions. Intermedia has recently consummated
its acquisitions of Shared Technologies and LDS and has entered into a
definitive agreement to acquire National. Such acquisitions could divert the
resources and management time of Intermedia and would require integration with
Intermedia's existing networks and services. There can be no assurance that the
pending acquisition of National will be consummated or that any other
acquisitions will occur or that any such acquisitions, including the
acquisitions of Shared Technologies and LDS and the pending acquisition of
National, if made, would be on terms favorable to Intermedia or would be
successfully integrated into Intermedia's operations.

         Consistent with its strategy, Intermedia is currently evaluating and
often engages in discussions regarding various acquisition opportunities. These
acquisitions could be funded by cash on hand and/or Intermedia's securities. It
is possible that one or more of such possible future acquisitions, if completed,
could adversely affect Intermedia's funds from operations or cash available for
distribution, in the short term, in the long term or both, or increase
Intermedia's debt, or such an acquisition could be followed by a decline in the
market value of Intermedia's securities.

         Failure to Obtain Third Party Consents in connection with an
Acquisition or Merger. Intermedia has consummated a number of acquisitions over
the past two years, including the acquisitions of Shared Technologies and LDS,
and expects to consummate additional acquisitions during the current fiscal
year. In connection therewith, Intermedia may not have obtained or, as in the
case of the acquisition of Shared Technologies and LDS, may have elected not to
seek, 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. Intermedia
believes that the failure to obtain any such third party consents should not
result in any material adverse consequences to Intermedia, although there can be
no assurance that such a consequence will not result.

                                       5
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         Year 2000 Risk. Intermedia has implemented a Year 2000 program to
ensure that its computer systems and applications will function properly beyond
1999. Intermedia believes that it has allocated adequate resources for this
purpose and expects its date conversion program to be successfully completed on
a timely basis. There can, however, be no assurance that this will be the case.
Intermedia does not expect to incur significant expenditures to address this
issue. The ability of third parties with whom Intermedia transacts business to
adequately address their Year 2000 issues is outside of Intermedia's control.
There can be no assurance that the failure of Intermedia or such third parties
to adequately address their respective Year 2000 issues will not have a material
adverse effect on the Intermedia's business, financial condition, cash flows and
results of operations.

         Regulatory Approval Relating to 1997 and 1998 Offerings. 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 obtain approval from all such states prior to the
consummation of the offerings of its securities during 1997 and will not have
received approvals from four states for the issuance of securities in connection
with the acquisition of LDS prior to the time the acquisition is consummated.
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 has filed all of the necessary notifications and applications
for approval in these states. After consultation with counsel, Intermedia
believes the remaining regulatory approvals will be granted and that obtaining
such approvals subsequent to the offerings should not result in any material
adverse consequences to Intermedia, although there can be no assurance that such
a consequence will not result.

         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 to exchange
traffic with other ISPs without having to pay settlement charges. Although
Intermedia meets the industry's current standards for peering, there is no
assurance that other national ISPs will maintain peering relationships with
Intermedia. In addition, there may develop increasing requirements associated
with maintaining peering relationships with the major national ISPs with which
Intermedia may have to comply. There can be no assurance that Intermedia will be
able to expand or adapt its 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 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
Intermedia to implement measures to reduce its exposure to such liability, which
could require the expenditure of substantial resources or the discontinuation of
certain product or service offerings. Intermedia believes that it is currently
unsettled whether the 1996 Act prohibits and imposes liability for any services
provided by Intermedia 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 Intermedia's business, financial condition and
results of operations.


                                       6
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         Dependence upon Network Infrastructure; Risk of System Failure;
Security Risks. Intermedia's success in marketing its services to business and
government users requires that Intermedia provide superior reliability, capacity
and security via its network infrastructure. Intermedia'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 Intermedia's customers. Similarly, Intermedia'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
Intermedia's business, financial condition and results of operations.

         Expansion Risk. Intermedia is experiencing a period of rapid expansion
which management expects will increase in the near future. This growth has
increased the operating complexity of Intermedia as well as the level of
responsibility for both existing and new management personnel. Intermedia'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. Intermedia's inability to effectively manage its
expansion could have a material adverse effect on its business.

         A portion of Intermedia'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 Intermedia's
future acquisitions, if any, will be successful or will not impair Intermedia's
ability to service its outstanding obligations.

         Risks of Implementation; Need to Obtain Permits and Rights of Way.
Intermedia is continuing to expand its existing networks. Intermedia has
identified other expansion opportunities and is currently extending the reach of
its networks to pursue such opportunities. There can be no assurance that
Intermedia will be able to expand its existing networks on a timely basis. The
expansion of Intermedia'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, Intermedia 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 Intermedia's customer base on its existing networks and
commencement of operations on new networks. If Intermedia 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, Intermedia faces significant
competition for the local network services, including local exchange services it
offers from ILECs, which currently dominate their local telecommunications
markets. ILECs have long-standing relationships with their 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 for
Intermedia. Intermedia 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, Intermedia 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 Intermedia's existing and potential
competitors have financial, personnel and other resources significantly greater
than those of Intermedia.


                                       7
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         Intermedia believes that various legislative initiatives, including the
1996 Act, have removed most of the 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 Intermedia, could be materially adversely
affected. In addition, while Intermedia currently competes with AT&T, MCI and
others in the interexchange services market, 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. This decision has been stayed pending appeal. 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, the local exchange services market, which is facilitated by the 1996
Act's resale and unbundled network element provisions. Intermedia 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 Intermedia'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 Federal Communication Commission ("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 markets for local exchange services.
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 requesting
review of these decisions have been granted. Most recently, on January 22, 1998,
the Eighth Circuit 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 pricing and other issues, these issues remain subject to scrutiny and
oversight by state regulatory commissions.

                                       8
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         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.

         Moreover, while the 1996 Act reduces regulation to which non-dominant
local exchange carriers are subject, it also reduces the level of regulation
that applies to the ILECs and increases their ability to respond quickly to
competition from Intermedia and others. For example, proposals pending before
the FCC may permit ILECs to change service rates more quickly and provide them
with greater pricing flexibility. In addition, the 1996 Act will permit RBOCs,
for the first time, to offer long distance service in the regions where they
provide local exchange service upon demonstrating to the FCC and state
regulatory agencies that they have complied with the FCC's interconnection
regulations designed to foster local exchange competition. While the FCC has not
approved the applications to provide in-region long distance service filed to
date, it may do so in the future. On December 31, 1997, a federal District Court
in Texas found unconstitutional the provisions of the 1996 Act restricting RBOCs
from providing long distance service in-region until they made such a
demonstration. The Court has stayed the decision and the issue is under appeal
but if the decision is upheld, RBOCs may be able to offer in-region long
distance service earlier than otherwise expected. RBOCs would then be able to
offer a combination of local and interexchange service to customers in direct
competition with Intermedia's service offerings.

         Potential Diminishing Rate of Growth. During the period from 1994
through 1997, Intermedia's revenues grew at a compound annual growth rate of
158.8% (including the effect of acquisitions). While Intermedia 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. Intermedia has recently
introduced a number of services, primarily local exchange services, that
Intermedia 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 Intermedia 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 Intermedia.

         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. Intermedia'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 Intermedia's business. Intermedia
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
Intermedia's key executives is a party to a long-term employment agreement with
Intermedia.

         Risk of Cancellation or Non-Renewal of Network Agreements, Licenses and
Permits. Intermedia has lease and/or purchase agreements for rights-of-way,
utility pole attachments, conduit and dark fiber for its fiber optic networks.
Although Intermedia 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 Intermedia's business in the
affected metropolitan area. In addition, Intermedia 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 Intermedia 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.


                                       9
<PAGE>

         Business Combinations; Change of Control. Intermedia 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 Intermedia and (ii) potential joint venture partners looking toward
the formation of strategic alliances that would expand the reach of Intermedia's
networks or services without necessarily requiring an additional investment in
Intermedia. 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. A change of control would require Intermedia to
repay its outstanding indebtedness and one series of its outstanding preferred
stock. A change of control also requires Intermedia to offer to redeem its other
outstanding series of preferred stock. If a change of control does occur, there
is no assurance that Intermedia would have sufficient funds, or could obtain any
additional debt or equity financing necessary, to make such repayments and
redemptions.

         Anti-Takeover Provisions. Intermedia's Certificate of Incorporation and
Bylaws, the provisions of the Delaware General Corporation Law (the "DGCL") and
Intermedia's outstanding indebtedness and preferred stock may make it difficult
in some respects to effect a change in control of Intermedia and replace
incumbent management. In addition, Intermedia'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 Intermedia 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, Intermedia's
preferred stock, which may have the effect of delaying or preventing a change in
control of Intermedia 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 pursuant to currently
effective registration statements, 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, including two
outstanding series of convertible preferred stock, could materially adversely
affect the market price of shares of Common Stock and could materially impair
Intermedia's future ability to raise capital through an offering of equity
securities. Substantially all of Intermedia's outstanding shares, other than
those held by affiliates, are covered by effective registration statements or
are transferable without restriction under the Securities Act. Additionally, the
purchase price for the acquisition of National will be funded at least in part
through the issuance of Common Stock. 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.

         Class Action by DIGEX Stockholders. On June 5, 1997, Intermedia
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 "DIGEX 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 DIGEX 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
DIGEX Merger, but no applications were made for such injunctions prior to the
consummation of the DIGEX 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.



                                       10
<PAGE>

         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.

         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
Intermedia or actual events differing from the assumptions underlying such
statements.



                                       11
<PAGE>

                                   THE COMPANY

                  Intermedia is a rapidly growing ICP delivering local, long
distance, enhanced data and Internet-related services to business and government
customers. Intermedia is the largest domestic independent company among those
companies generally referred to as CLECs (based upon annualized
telecommunications services revenues and assuming the closing of the announced
transaction between AT&T, Inc. and Teleport Communications Group, Inc.) and is
also the largest provider of shared tenant telecommunications services in the
United States. As a tier-one ISP and the fourth largest (based on number of
nodes) frame relay provider in the United States, Intermedia is also a leading
provider of enhanced data services to business and government customers.
Intermedia provides services to its customers throughout the United States and
in selected international markets through a combination of owned and leased
network facilities. As an ICP with over ten years experience focusing on
business and government customers, Intermedia believes it is positioned to take
advantage of technical, regulatory and market dynamics which currently promote
demand for a fully integrated set of communications services.

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

Recent Developments

         Acquisitions. In March 1998, Intermedia consummated the acquisition of
LDS for a purchase price of approximately $151.0 million, of which approximately
$130.0 million is payable in Intermedia Common Stock and approximately $21.0
million is payable in cash, in each case, subject to certain adjustments. LDS is
an established regional interexchange carrier, providing long distance services
and Internet access to more than 45,000 business subscribers and employing over
100 sales and customer service professionals in Louisiana, Texas, Oklahoma,
Mississippi and Florida. The acquisition of LDS will provide a significant
time-to-market advantage in a region important to Intermedia's expansion plan,
while also contributing an experienced regional management team and established
sales platform. Because LDS's service portfolio and footprint complements that
of Intermedia, Intermedia believes that the pending acquisition of LDS also
presents significant synergy realization opportunities. By joining forces with
an established operating company with a staff of experienced sales, management
and technical personnel, Intermedia expects to consolidate its position in these
southern markets.


                                 USE OF PROCEEDS

         Intermedia is not selling any of the Shares and will not receive any
proceeds from the sale of the Shares by the Selling Securityholders.

                                       12
<PAGE>

                           THE SELLING SECURITYHOLDERS

         The following table sets forth, as of the closing of the acquisition of
LDS, certain information regarding the Selling Securityholders' ownership of
Intermedia's Common Stock. Unless otherwise disclosed in the footnotes to the
table, no Selling Securityholder has held any position, office or had any other
material relationship with Intermedia, its predecessors or affiliates during the
past three years. To the knowledge of Intermedia, except as disclosed below, the
Selling Securityholders own all of the Shares and do not own, nor have any
rights to acquire, any other shares of Common Stock as of the date of this
Prospectus.
<TABLE>
<CAPTION>

                                             Beneficially Owned Prior       
                                                to This Offering(1)         
                                          ----------------------------      
                                           Number of      Percent of          Offered            Beneficially Owned       
Name of Selling Securityholder               Shares        Shares(2)          for Sale           After This Offering(1)     
- -----------------------------             -----------    -----------        ------------      --------------------------       
<S>                                         <C>             <C>               <C>                          <C>
Freddy Nolan                                1,024,973       5.01%             1,024,973                    0
Reba Nolan                                      4,386         *                   4,386                    0
William L. Montgomery                         388,036       1.90%               388,036                    0
William D. Hoover                             146,241         *                 146,241                    0
Gayle D. Hoover Trust - 1991                  128,178         *                 128,178                    0
Terri Hoover Debnam                           248,328       1.21%               248,328                    0
Gary D. Hoover                                248,519       1.22%               248,519                    0
Stephanie A. Hoover Trust - 1991              258,096       1.26%               258,096                    0
Christopher B. Chelette                        13,232         *                  13,232                    0
Avril L. Fowler, Jr.                           13,232         *                  13,232                    0
Garry L. Findley                                6,748         *                   6,748                    0
Gary L. Woodruff                               23,828         *                  23,828                    0
Lyn D. Johnson                                 23,828         *                  23,828                    0
John R. Hollis 1988 Revocable Trust         
under Agreement Dated
February 26, 1988, John R. Hollis,
Trustee                                        32,123         *                  32,123                    0
Wesley R. Johnson and Deanna V.                
Johnson                                        23,828         *                  23,828                    0                        
Kenneth Doughty Revocable Trust                
under Agreement Dated                                                                                  
April 7, 1994, Kenneth Doughty,                                                                        
Trustee                                        16,061         *                  16,061                    0                        
</TABLE> 




                                                                   

                                       13
<PAGE>



<TABLE>
<CAPTION>
                                             Beneficially Owned Prior       
                                                to This Offering(1)         
                                          ----------------------------      
                                           Number of      Percent of          Offered            Beneficially Owned       
Name of Selling Securityholder               Shares        Shares(2)          for Sale           After This Offering(1)     
- -----------------------------             -----------    -----------        ------------      --------------------------       
<S>                                            <C>                               <C>                     <C>
Florene Doughty Revocable Trust                
under Agreement Dated                                                                                  
April 7, 1994, Kenneth and                                                                             
Florene Doughty, Trustees                      16,061         *                  16,061                   0                         
Lawrence D. Ferk                                1,976         *                   1,976                   0
William Neil Montgomery                         5,883         *                   5,883                   0
Michael Todd Montgomery                         5,883         *                   5,883                   0
Thomas W. Winkler                                 988         *                     988                   0
Michael L. Tinnerello                             988         *                     988                   0
Robert J. Calibani, Trustee,                    
Robert J. Calibani Living Trust                                                                        
Dated April 23, 1997                            1,976         *                   1,976                   0                         
Albert D. Burson                                  988         *                     988                   0
Morgan Family Revocable Trust,                  
Joseph B. Morgan, III and Paula                                                                        
K. Morgan, Trustee                              1,976         *                   1,976                   0                         
Pat O. Daily Revocable Trust,                   
Pat O. Daily, Trustee                           1,976         *                   1,976                   0                         
Mary Lee Daily Prout Revocable
Trust, Mary L. Prout and Paul Lee                                                                      
Prout, Trustee                                  1,976         *                   1,976                   0                         
Jason Doughty                                     494         *                     494                   0
Alicia Nicole Nolan Villarreal                  9,768         *                   9,768                   0
Ashley Nolan                                    9,768         *                   9,768                   0
Gary D. Hoover, Custodian for                   
Madeline Hoover under Louisiana                                                                        
UGMA                                            9,768         *                   9,768                   0                         
Terri Hoover Debnam, Custodian                  
for Matthew Debnam under                                                                               
Louisiana UTMA                                  3,256         *                   3,256                   0                         
Terri Hoover Debnam, Custodian                  
for Emily Debnam under Louisiana                                                                       
UTMA                                            3,256         *                   3,256                   0                         
Terri Hoover Debnam, Custodian                  
for Mallory Debnam under                                                                               
Louisiana UTMA                                  3,256         *                   3,256                   0                         
</TABLE>
         *Less than one percent. Based on 17,774,248 shares of common stock
outstanding on March 27, 1998 plus 2,679,874 shares to be issued in connection
with the acquisition of LDS.

(1)      Under the rules of the Commission, a person is deemed to be the
         beneficial owner of a security if such person has or shares the power
         to vote or direct the voting of such security or the power to dispose
         or direct the disposition of such security. A person is also deemed to
         be a beneficial owner of any securities if that person has the right to
         acquire beneficial ownership within 60 days. Accordingly, more than one
         person may be deemed to be a beneficial owner of the same securities.
         Unless otherwise indicated by footnote, the named individuals have sole
         voting and investment power with respect to the securities beneficially
         owned.

(2)      The percentage of shares beneficially owned by each Selling
         Securityholder is based on 20,454,122 shares of common stock
         (17,774,248 shares of common stock outstanding on March 27, 1998 plus
         2,679,874 shares which will be issued at the closing of the acquisition
         of LDS).

                                       14
<PAGE>

         The 2,679,874 Shares to be owned by the Selling Securityholders
represent all of the securities covered by this Registration Statement of which
this Prospectus is a part. The 2,679,874 Shares would have had an aggregate
market value of approximately $223,601,986.88 on March 30, 1998 (based on the
$83.4375 per share closing price of the Common Stock on that date). Upon the
closing of the that certain Acquisition Agreement dated as of December 17, 1997
among Intermedia and the holders of interest in LDS (the "LDS Merger
Agreement"), a pro-rata amount of the Shares owned by the Selling
Securityholders will be held in escrow for certain obligations they may have
under the LDS Merger Agreement, as described below.

         A total of approximately 52,581 Shares (the "Purchase Price Escrow
Shares") will be held by an escrow agent (the "Escrow Agent") until a final
determination of the adjustments to the purchase price for the acquisition of
LDS is determined. After such final determination, the Purchase Price Escrow
Shares will either be released to the Selling Securityholder or returned to
Intermedia and subsequently canceled.

         A total of approximately 87,634 Shares (the "Indemnity Escrow Shares")
will be held by the Escrow Agent as security for certain indemnification
obligations of the Selling Securityholders pursuant to the LDS Merger Agreement.
For a period of three years following the Closing Date (the "Indemnification
Period"), Intermedia may assert claims for indemnification against the Indemnity
Escrow Shares. At the expiration of the Indemnification Period, the Escrow Agent
shall deliver any remaining Indemnity Escrow Shares to the Selling
Securityholders.

         Any Purchase Price Escrow Shares or Indemnity Escrow Shares which are
required to be delivered to satisfy a payment or indemnity obligation under the
LDS Merger Agreement shall be deemed to be valued at $51.1875 per Share,
notwithstanding the actual market or other value of the Shares at the time of
delivery.

         The Shares will be acquired by the Selling Securityholders pursuant to
an exemption from the registration requirements of the Securities Act pursuant
to Section 4(2) thereof. Pursuant to the LDS Merger Agreement, the Selling
Securityholders have agreed that they will not sell or transfer more than 1/12th
of the Shares during each of the 12 months following the date of the closing of
the LDS Merger Agreement (calculated on a cumulative basis). However, this
restriction will not prohibit (i) a person or entity to which the Shares are
pledged from selling such Shares after a default in the obligations secured by
such pledge or (ii) a Selling Securityholder from selling such Shares upon the
announcement by Intermedia of a Change in Control of Intermedia (as defined in
the LDS Merger Agreement), whereupon the foregoing restriction on the sale or
transfer of the Shares will immediately lapse.

         In addition, the LDS Merger Agreement requires Intermedia to file a
registration statement covering the Shares and to use its reasonable efforts to
keep such registration statement continuously effective for a period of two
years following the date on which it is declared effective (or, except as
otherwise provided in the LDS Merger Agreement, to immediately file a new
registration statement in the event such effectiveness lapses at any time during
such two-year period). Intermedia has filed this Registration Statement to
fulfill its obligations under the LDS Merger Agreement.


                                       15
<PAGE>

                              PLAN OF DISTRIBUTION

         Intermedia will not receive any proceeds from the sale of the Shares
offered hereby. The Shares may be sold from time to time in accordance with the
transfer restrictions set forth in the LDS Merger Agreement to purchasers
directly by the Selling Securityholders. Alternatively, the Selling
Securityholders may from time to time in accordance with the transfer
restrictions set forth in the LDS Merger Agreement offer the Shares through
brokers, dealers or agents who may receive compensation in amounts to be
negotiated immediately prior to the sale in the form of discounts, concessions
or commissions from the Selling Securityholders and/or the purchasers of the
Shares for whom they may act as agent. The Selling Securityholders and any such
brokers, dealers or agents who participate in the distribution of the Shares may
be deemed to be "underwriters", and any profits on the sale of the Shares by
them and any discounts, commissions or concessions received by any such brokers,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act. To the extent the Selling Securityholders may be
deemed to be underwriters, the Selling Securityholders may be subject to certain
statutory liabilities under the Securities Act, including, but not limited to,
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange
Act.

         The Shares offered hereby may be sold by the Selling Securityholders or
by pledgees, donees, transferees or other successors in interest from time to
time in one or more transactions in accordance with the restrictions on transfer
of the Shares set forth in the LDS Merger Agreement. Such sales may be made on
one or more exchanges or in the over-the-counter market or otherwise at fixed
prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. The Shares may be sold
by one or more of the following methods, without limitation: (a) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (d) an exchange distribution in accordance with the rules of such
exchange; (e) face-to-face transactions between sellers and purchasers without a
broker-dealer; (f) through the writing of options; and (g) other methods. In
addition, the Shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 of the Securities Act may be sold under Rule 144 of the Securities
Act rather than pursuant to this Prospectus. From time to time, the Selling
Securityholders may engage in short sales, short sales versus the box, puts and
calls and other transactions in the Shares or derivatives thereof, and may sell
and deliver the Shares in connection therewith.

         To the best knowledge of Intermedia, there are currently no plans,
arrangements or understandings between any Selling Securityholders and any
broker, dealer, agent or underwriter regarding the sale of the Shares by the
Selling Securityholders. There is no assurance that any Selling Securityholder
will sell any or all of the Shares offered by it hereunder or that any such
Selling Securityholder will not transfer, devise or gift such Shares by other
means not described herein.

         The Selling Securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M, which may limit the timing of purchases and sales of any of the Shares by the
Selling Securityholders and any other such person. All of the foregoing may
affect the marketability of the Shares and the ability of any person or entity
to engage in market-making activities with respect to the Shares.


                                       16
<PAGE>

                 INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

         Intermedia's Certificate of Incorporation provides that Intermedia will
to the fullest extent permitted by the DGCL indemnify all persons whom it may
indemnify pursuant thereto. Intermedia's Bylaws contain a similar provision
requiring indemnification of Intermedia's directors and officers to the fullest
extent authorized by the DGCL. The DGCL 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 Intermedia 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 DGCL 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, Intermedia's Certificate of Incorporation
contains a provision limiting the personal liability of Intermedia's directors
for monetary damages for certain breaches of their fiduciary duty. Intermedia
has indemnification insurance under which directors and officers are insured
against certain liability that may occur in their capacity as such.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling Intermedia
pursuant to the foregoing provisions, Intermedia has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by 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.

                                  LEGAL MATTERS

         The legality of the securities offered hereby has been passed upon for
Intermedia by Kronish, Lieb, Weiner & Hellman LLP, 1114 Avenue of the Americas,
New York, New York 10036-7798. 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.



                                       17
<PAGE>


                                     EXPERTS

         The consolidated financial statements and schedule of Intermedia
Communications Inc. and Subsidiaries appearing in Intermedia Communication Inc.
and Subsidiaries' Annual Report (Form 10-K) for the year ended December 31,
1997, 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 Shared Technologies Fairchild
Inc. and Subsidiaries appearing in Intermedia Communications Inc. and
Subsidiaries' Annual Report (Form 10-K) for the year ended December 31, 1997,
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 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 in
this 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 statements of operations, stockholders' equity and
cash flows of Shared Technologies Fairchild Inc. and Subsidiaries for the year
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.



                                       18

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