

                           COMPANY RISK FACTORS


     As used herein, unless the context otherwise requires, the "Company"
and "ACC" refer to ACC Corp. and its subsidiaries, including ACC Long
Distance Corp. ("ACC U.S."), ACC TelEnterprises Ltd., the Company's 70%
owned Canadian subsidiary ("ACC Canada"), and ACC Long Distance UK Ltd.
("ACC U.K.").  References herein to "dollar" and "$" are to United States
dollars, references to "Cdn. $" are to Canadian dollars, references to 
"Pounds" are to English pounds sterling, the terms "United States" and 
"U.S." mean the United States of America and, unless the context otherwise 
requires, its states, territories and possessions and all areas subject to 
its jurisdiction, and the terms "United Kingdom" and "U.K." mean England,
Scotland and Wales.


RECENT LOSSES; POTENTIAL FLUCTUATIONS IN OPERATING RESULTS

     Although the Company has recently experienced revenue growth on an
annual basis, it has incurred net losses and losses from continuing
operations during each of its last two fiscal years.  The 1995 net loss of
$5.4 million resulted primarily from the expansion of operations in the
U.K. (approximately $6.8 million), increased net interest expense
associated with additional borrowings (approximately $4.9 million),
increased depreciation and amortization from the addition of equipment and
costs associated with the expansion of local service in New York State
(approximately $1.6 million) and management restructuring costs
(approximately $1.3 million), offset by positive operating income from the
U.S. and Canadian long distance subsidiaries of approximately $9.0 million.

The 1994 net loss of $11.3 million resulted primarily from operating losses
due to expansion in the U.K. (approximately $5.6 million), the recording of
the valuation allowance against deferred tax benefits (approximately $3.0
million), implementation of equal access in Canada (approximately  $2.2
million) and operating losses due to expansion in local telephone service
in the U.S. (approximately $0.9 million).  There can be no assurance that
revenue growth will continue or that the Company will achieve profitability
in the future.  The Company intends to focus in the near term on the
expansion of its service offerings, including its local telephone business,
and geographic markets, which may adversely affect cash flow and operating
performance.  As each of the telecommunications markets in which the
Company operates continues to mature, growth in the Company's revenues and
customer base is likely to decrease over time.

     The Company's operating results have fluctuated in the past and may
fluctuate significantly in the future as a result of a variety of factors,
some of which are outside of the Company's control, including general
economic conditions, specific economic conditions in the telecommunications
industry, the effects of governmental regulation and regulatory changes,
user demand, capital expenditures and other costs relating to the expansion
of operations, the introduction of new services by the Company or its
competitors, the mix of services sold and the mix of channels through which
those services are sold, pricing changes and new service introductions by
the Company and its competitors and prices charged by suppliers.  As a
strategic response to a changing competitive environment, the Company may
elect from time to time to make certain pricing, service or marketing
decisions or enter into strategic alliances, acquisitions or investments
that could have a material adverse effect on the Company's business,
results of operations and cash flow.  The Company's sales to other long
distance companies have been increasing.  Because these sales are at
margins that are lower than those derived from most of the Company's other
revenues, this increase may reduce the Company's gross margins as a
percentage of revenue.  In addition, to the extent that these and other
long distance couriers are less creditworthy, such sales may represent a
higher credit risk to the Company.  See "-Risks Associated With
Acquisitions, Investments and Strategic Alliances."

SUBSTANTIAL INDEBTEDNESS; NEED FOR ADDITIONAL CAPITAL

     The Company will need to continue to enhance and expand its operations
in order to maintain its competitive position, expand its service offerings
and geographic markets and continue to meet the increasing demands for
service quality, availability and competitive pricing.  As of the end of
its last five fiscal years, the Company has experienced a working capital
deficit.  During 1995, the Company's EBITDA (which represents income (loss)
from operations plus depreciation and amortization and asset write-down)
minus capital expenditures and changes in working capital was $(7.0)
million.  The Company is highly leveraged.  The Company's leverage may
adversely affect its ability to raise additional capital.  In addition, the
Company's indebtedness requires significant repayments over the next five
years.  The Company may need to raise additional capital from public or
private equity or debt sources in order to finance its anticipated growth,
including local service expansion, which is capital intensive, working
capital needs, debt service obligations, contemplated capital expenditures
and the optional redemption of the Series A Preferred Stock if it is not
converted.  In addition, the Company may need to raise additional funds in
order to take advantage of unanticipated opportunities, including more
rapid international expansion or acquisitions of, investments in or
strategic alliances with companies that are complementary to the Company's
current operations, or to develop new products or otherwise respond to
unanticipated competitive pressures.  If additional funds are raised
through the issuance of equity securities, the percentage ownership of the
Company's then current shareholders would be reduced and, if such equity
securities take the form of Preferred Stock or Class B Common Stock, the
holders of such Preferred Stock or Class B Common Stock may have rights,
preferences or privileges senior to those of holders of Class A Common
Stock.  There can be no assurance that the Company will be able to raise
such capital on satisfactory terms or at all.  If the Company decides to
raise additional funds through the incurrence of debt, the Company would
need to obtain the consent of its lenders under the Company's revolving
credit facility with First Union National Bank of North Carolina and Fleet
Bank of Connecticut (formerly Shawmut Bank Connecticut, N.A.), as agents,
which expires on July 1, 2000 (the "Credit Facility") and would likely
become subject to additional or more restrictive financial covenants.  In
the event that the Company is unable to obtain such additional capital or
is unable to obtain such additional capital on acceptable terms, the
Company may be required to reduce the scope of its presently anticipated
expansion, which could materially adversely affect the Company's business,
results of operations and financial condition and its ability to compete.

DEPENDENCE ON TRANSMISSION FACILITIES-BASED CARRIERS AND SUPPLIERS

     The Company does not own telecommunications transmission lines. 
Accordingly, telephone calls made by the Company's customers are connected
through transmission lines that the Company leases under a variety of
arrangements with transmission facilities-based long distance carriers,
some of which are or may become competitors of the Company, including AT&T
Corp. ("AT&T"), Bell Canada and British Telecommunications PLC ("British
Telecom").  Most inter-city transmission lines used by the Company are
leased on a monthly or longer-term basis at rates that currently are less
than the rates the Company charges its customers for connecting calls
through these lines.  Accordingly, the Company is vulnerable to changes in
its lease arrangements, such as price increases and service cancellations. 
ACC's ability to maintain and expand its business is dependent upon whether
the Company continues to maintain favorable relationships with the
transmission facilities-based carriers from which the Company leases
transmission lines, particularly in the U.K., where British Telecom and
Mercury Communications Ltd. ("Mercury") are the two principal, dominant
carriers.  The Company's U.K. operations are highly dependent upon the
transmission lines leased from British Telecom.  The Company generally
experiences delays in billings from British Telecom and needs to reconcile
billing discrepancies with British Telecom before making payment.  Although
the Company believes that its relationships with carriers generally are
satisfactory, the deterioration or termination in the Company's
relationships with one or more of those carriers could have a material
adverse effect upon the Company's business, results of operations and
financial condition.  Certain of the vendors from whom the Company leases
transmission lines, including 22 regional operating companies ("RBOCs") and
other local exchange carriers, currently are subject to tariff controls and
other price constraints which in the future may be changed.  Under recently
enacted U.S. legislation, constraints on the operations of the RBOCs have
been dramatically reduced, which will bring additional competitors to the
long distance market.  In addition, regulatory proposals are pending that
may affect the prices charged by the RBOCs and other local exchange
carriers to the Company, which could have a material adverse effect on the
Company's business, financial condition and results of operations.  See
"-Potential Adverse Effects of Regulation."  The Company currently acquires
switches used in its North American operations from one vendor.  The
Company purchases switches from such vendor for its convenience, and
switches of comparable quality may be obtained from several alternative
suppliers.  However, a failure by a supplier to deliver quality products on
a timely basis, or the inability to develop alternative sources if and as
required, could result in delays which could have a material adverse effect
on the Company's business, results of operations and financial condition.

POTENTIAL ADVERSE EFFECTS OF REGULATION

     Legislation that substantially revises the U.S. Communications 
Act of 1934 (the "U.S. Communications Act") was signed into law on
February 8, 1996.  The legislation provides specific guidelines under
which  the RBOCs can provide long distance services,  which  will  permit 
the  RBOCs  to  compete  with  the  Company  in  the provision of domestic
and international long distance services.  The legislation opens all local
service markets to competition from any entity (including long distance
carriers, such as AT&T, cable television companies and utilities).  Because
the legislation opens the Company's markets to additional competition,
particularly from the RBOCs, the Company's ability to compete is likely to
be adversely affected.  Moreover, as a result of and to implement the
legislation, certain federal and other governmental regulations will be
amended or modified, and any such amendment or modification could have a
material adverse effect on the Company's business, results of operations
and financial condition.

     In the U.S., the Federal Communications Commission ("FCC") and
relevant state public service commissions ("PSCs") have the authority to
regulate interstate and intrastate rates, respectively, ownership of
transmission facilities, and the terms and conditions under which the
Company's services are provided.  Federal and state regulations and
regulatory trends have had, and in the future are likely to have, both
positive and negative effects on the Company and its ability to compete. 
The recent trend in both Federal and state regulation of telecommunications
service providers has been in the direction of lessened regulation.  In
general, neither the FCC nor the relevant state PSCs currently regulate the
Company's long distance rates or profit levels, but either or both may do
so in the future.  However, the general recent trend toward lessened
regulation has also given AT&T, the largest long distance carrier in the
U.S., increased pricing flexibility that has permitted it to compete more
effectively with smaller interexchange carriers, such as the Company. 
There can be no assurance that changes in current or future Federal or
state regulations or future judicial changes would not have a material
adverse effect on the Company.

     In order to provide their services, interexchange carriers, including
the Company, must generally purchase "access" from local exchange carriers
to originate calls from and terminate calls in the local exchange telephone
networks.  Access charges presently represent a significant portion of the
Company's network costs in all areas in which it operates.  In the U.S.,
access charges generally are regulated by the FCC and the relevant state
PSCs.  Under the terms of the AT&T Divestiture Decree, a court order
entered in 1982 which, among other things, required AT&T to divest its 22
wholly-owned RBOCs from its long distance division ("AT&T Divestiture
Decree"), the RBOCs were required to price the "local transport" portion of
such access charges on an "equal price per unit of traffic" basis.  In
November 1993, the FCC implemented new interim rules governing local
transport access charges while the FCC considers permanent rules regarding
new rate structures for transport pricing and switched access competition. 
These interim rules have essentially maintained the "equal price per unit
of traffic" rule.  However, under alternative access charge rate structures
being considered by the FCC, local exchange carriers would be permitted to
allow volume discounts in the pricing of access charges.  If these rate
structures are adopted, access charges for AT&T and other large
interexchange carriers would decrease, and access charges for small
interexchange carriers would increase.  While the outcome of these
proceedings is uncertain, should the FCC adopt permanent access charge
rates along the lines of the proposed structures it is currently
considering, the Company would be at a cost disadvantage with regard to
access charges in comparison to AT&T and larger interexchange carrier
competitors.

     The Company currently competes with the RBOCs and other local exchange
carriers in the provision of "short haul" toll calls completed within a
Local Access and Transport Area ("LATA"), and will in the future, under
provisions of recently enacted federal legislation, compete with such
carriers in the long-haul, or inter-LATA, toll business.  To complete
long-haul and short-haul toll calls, the Company must purchase "access"
from the local exchange carriers.  The Company must generally price its
toll services at levels equal to or below the retail rates established by
the local exchange carriers for their own short-haul or long-haul toll
rates.  To the extent that the local exchange carriers are able to reduce
the margin between the access costs to the Company and the retail toll
prices charged by local exchange carriers, either by increasing access
costs or lowering retail toll rates, or both, the Company will encounter
adverse pricing and cost pressures in competing against local exchange
carriers in both the short-haul and long-haul toll markets.

     In Canada, services provided by ACC Canada are subject to or affected
by certain regulations of the Canadian Radio-television and
Telecommunications Commission (the "CRTC").  The CRTC annually reviews the
"contribution charges" (the equivalent of access charges in the U.S.) it
has assessed against the access lines leased by Canadian long distance
resellers, including the Company, from the local telephone companies in
Canada.  The Company expects that, based on existing and anticipated
regulations and rulings, its Canadian contribution charges will increase by
up to approximately Cdn. $2.0 million in 1997 over 1995 levels, which the
Company will seek to offset with increased volume efficiencies.  Additional
increases in these contribution charges could have a material adverse
effect on the Company's business, results of operations and financial
condition.  The Canadian long distance telecommunications industry is the
subject of ongoing regulatory change.  These regulations and regulatory
decisions have a direct and material effect on the ability of the Company
to conduct its business.  The recent trend of such regulations has been to
open the market to commercial competition, generally to the Company's
benefit.  There can be no assurance, however, that any future changes in or
additions to laws, regulations, government policy or administrative rulings
will not have a material adverse effect on the Company's business, results
of operations and financial condition.

     The telecommunications services provided by ACC U.K. are subject to
and affected by regulations introduced by the U.K. telecommunications
regulatory authority, The Office of Telecommunications ("Oftel").  Since
the break up of the U.K. telecommunications duopoly consisting of British
Telecom and Mercury in 1991, it has been the stated goal of Oftel to create
a competitive marketplace from which detailed regulation could eventually
be withdrawn.  The regulatory regime currently being introduced by Oftel
has a direct and material effect on the ability of the Company to conduct
its business.  Oftel has imposed mandatory rate reductions on British
Telecom in the past, which are expected to continue for the foreseeable
future, and this has had and may have, the effect of reducing the prices
the Company can charge its customers.  Although the Company is optimistic
about its ability to continue to compete effectively in the U.K. market,
there can be no assurance that future changes in regulation and government
will not have a material adverse effect on the Company's business, results
of operations and financial condition.

INCREASING DOMESTIC AND INTERNATIONAL COMPETITION

     The long distance telecommunications industry is highly competitive
and is significantly influenced by the marketing and pricing decisions of
the larger industry participants.  The industry has relatively
insignificant barriers to entry, numerous entities competing for the same
customers and high churn rates (customer turnover), as customers frequently
change long distance providers in response to the offering of lower rates
or promotional incentives by competitors.  In each of its markets, the
Company competes primarily on the basis of price and also on the basis of
customer service and its ability to provide a variety of telecommunications
services.  The Company expects competition on the basis of price and
service offerings to increase.  Although many of the Company's university
customers are under multi-year contracts, several of the Company's largest
customers (primarily other long distance carriers) are on month-to-month
contracts and are particularly price sensitive.  Revenues from other
resellers accounted for approximately 22%, 7% and 9%, of the revenues of
ACC U.S., ACC Canada and ACC U.K., respectively, in 1995, and 22.4%, 9.3% and 
16.6%, of the revenues of ACC U.S., ACC Canada and ACC U.K., respectively,
in the first quarter of 1996, and are expected to account for a higher 
percentage in the future.  With respect to these customers, the Company 
competes almost exclusively on price.

     Many of the Company's competitors are significantly larger, have
substantially greater financial, technical and marketing resources and
larger networks than the Company, control transmission lines and have
long-standing relationships with the Company's target customers.  These
competitors include, among others, AT&T, MCI Telecommunications Corporation
("MCI") and Sprint Corp. ("Sprint") in the U.S.; Bell Canada, BC Telecom,
Inc., Unitel Communications Inc. ("Unitel") and Sprint Canada (a subsidiary
of Call-Net Telecommunications Inc.) in Canada; and British Telecom,
Mercury, AT&T and IDB WorldCom Services Inc. in the U.K. Other U.S.
carriers are also expected to enter the U.K. market.  The Company also
competes with numerous other long distance providers, some of which focus
their efforts on the same business customers targeted by the Company and
selected residential customers and colleges and universities, the Company's
other target customers.  In addition, through its local telephone service
business in upstate New York, the Company competes with New York Telephone
Company ("New York Telephone"), Frontier Corp., Citizens Telephone Co., MFS
Communications Co., Inc. ("MFS") and Time Warner Cable and others,
including cellular and other wireless providers.  Furthermore, the recently
announced proposed merger of Bell Atlantic Corp. and Nynex Corp., the
recently announced joint venture between MCI and Microsoft Corporation
("Microsoft"), under which Microsoft will promote MCI's services, the
recently announced joint venture among Sprint, Deutsche Telekom AG and
France Telecom, and other mergers, acquisitions and strategic alliances,
could also increase competitive pressures upon the Company and have a
material adverse effect on the Company's business, results of operations
and financial condition.

     In addition to these competitive factors, recent and pending
deregulation in each of the Company's markets may encourage new entrants. 
For example, as a result of legislation recently enacted in the U.S., RBOCs
will be allowed to enter the long distance market, AT&T, MCI and other long
distance carriers will be allowed to enter the local telephone services
market, and any entity (including cable television companies and utilities)
will be allowed to enter both the local service and long distance
telecommunications markets.  In addition, the FCC has, on several occasions
since 1984, approved or required price reductions by AT&T and, in October
1995, the FCC reclassified AT&T as a "non-dominant" carrier, which
substantially reduces the regulatory constraints on AT&T.  As the Company
expands its geographic coverage, it will encounter increased competition. 
Moreover, the Company believes that competition in non-U.S. markets is
likely to increase and become more similar to competition in the U.S.
markets over time as such non-U.S. markets continue to experience
deregulatory influences.  Prices in the long distance industry have
declined from time to time in recent years and, as competition increases in
Canada and the U.K., prices are likely to continue to decrease.  For
example, Bell Canada substantially reduced its rates during the first
quarter of 1994.  The Company's competitors may reduce rates or offer
incentives to existing and potential customers of the Company.  To maintain
its competitive position, the Company believes that it must be able to
reduce its prices in order to meet reductions in rates, if any, by others.

     The Company has only limited experience in providing local telephone
services, having commenced providing such services in 1994, and, although
the Company believes the local business will enhance its ability to compete
in the long distance market, to date the Company has experienced an
operating cash flow deficit in the operation of that business in the U.S.
on a stand-alone basis.  The Company's revenues from local telephone
services in 1995 were $1.35 million.  In order to attract local customers,
the Company must offer substantial discounts from the prices charged by
local exchange carriers and must compete with other alternative local
companies that offer such discounts.  The local telephone service business
requires significant initial investments in capital equipment as well as
significant initial promotional and selling expenses.  Larger, better
capitalized alternative local providers, including AT&T and Time Warner
Cable, among others, will be better able to sustain losses associated with
discount pricing and initial investments and expenses.  There can be no
assurance that the Company will achieve positive cash flow or profitability
in its local telephone service business.


RISKS OF GROWTH AND EXPANSION

     The Company plans to expand its service offerings and principal
geographic markets in the United States, Canada and the United Kingdom.  In
addition, the Company may establish a presence in deregulating Western
European markets that have high density telecommunications traffic, such as
France and Germany, when the Company believes that business and regulatory
conditions warrant.  There can be no assurance that the Company will be
able to add service or expand its markets at the rate presently planned by
the Company or that the existing regulatory barriers will be reduced or
eliminated.  The Company's rapid growth has placed, and in the future may
continue to place, a significant strain on the Company's administrative,
operational and financial resources and increased demands on its systems
and controls.  As the Company increases its service offerings and expands
its targeted markets, there will be additional demands on the Company's
customer support, sales and marketing and administrative resources and
network infrastructure.  There can be no assurance that the Company's
operating and financial control systems and infrastructure will be adequate
to maintain and effectively monitor future growth. The failure to continue
to upgrade the administrative, operating and financial control systems or
the emergence of unexpected expansion difficulties could materially
adversely affect the Company's business, results of operations and
financial condition.


RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

     A key component of the Company's strategy is its planned expansion in
international markets.  To date, the Company has only limited experience in
providing telecommunications service outside the United States and Canada. 
There can be no assurance that the Company will be able to obtain the
capital it requires to finance its expansion in international markets on
satisfactory terms or at all.  In many international markets, protective
regulations and long-standing relationships between potential customers of
the Company and their local providers create barriers to entry.  Pursuit of
international growth opportunities may require significant investments for
an extended period before returns, if any, on such investments are
realized.  In addition, there can be no assurance that the Company will be
able to obtain the permits and operating licenses required for it to
operate, to hire and train employees or to market, sell and deliver high
quality services in these markets.  In addition to the uncertainty as to
the Company's ability to expand its international presence, there are
certain risks inherent to doing business on an international level, such as
unexpected changes in regulatory requirements, tariffs, customs, duties and
other trade barriers, difficulties in staffing and managing foreign
operations, longer payment cycles, problems in collecting accounts
receivable, political risks, fluctuations in currency exchange rates,
foreign exchange controls which restrict or prohibit repatriation of funds,
technology export and import restrictions or prohibitions, delays from
customs brokers or government agencies, seasonal reductions in business
activity during the summer months in Europe and certain other parts of the
world and potentially adverse tax consequences resulting from operating in
multiple jurisdictions with different tax laws, which could materially
adversely impact the success of the Company's international operations.  In
many countries, the Company may need to enter into a joint venture or other
strategic relationship with one or more third parties in order to
successfully conduct its operations.  As its revenues from its Canadian and
U.K. operations increase, an increasing portion of the Company's revenues
and expenses will be denominated in currencies other than U.S. dollars, and
changes in exchange rates may have a greater effect on the Company's
results of operations.  There can be no assurance that such factors will
not have a material adverse effect on the Company's future operations and,
consequently, on the Company's business, results of operations and
financial condition.  In addition, there can be no assurance that laws or
administrative practices relating to taxation, foreign exchange or other
matters of countries within which the Company operates will not change. 
Any such change could have a material adverse effect on the Company's
business, financial condition and results of operations.

DEPENDENCE ON EFFECTIVE INFORMATION SYSTEMS

     To complete its billing, the Company must record and process massive
amounts of data quickly and accurately.  While the Company believes its
management information system is currently adequate, it has not grown as
quickly as the Company's business and substantial investments are needed. 
The Company has made arrangements with a consultant and a vendor for the
development of new information systems and has budgeted approximately
$6.0 million for this purpose in 1996.  The Company believes that the
successful implementation and integration of these new information systems
is important to its continued growth, its ability to monitor costs, to bill
customers and to achieve operating efficiencies, but there can be no
assurance that the Company will not encounter delays or cost-overruns or
suffer adverse consequences in implementing the systems.  A vendor of the
Company's software, which formerly was an affiliate of the Company, has a
unique knowledge of certain of the Company's software and the Company may
be dependent on the vendor for any modifications to the software.  The
Company believes that it currently is the only customer of the vendor and,
as a result, the vendor is financially dependent on the Company.  In
addition, as the Company's suppliers revise and upgrade their hardware,
software and equipment technology, there can be no assurance that the
Company will not encounter difficulties in integrating the new technology
into the Company's business or that the new systems will be appropriate for
the Company's business.  

RISKS ASSOCIATED WITH ACQUISITIONS, INVESTMENTS AND STRATEGIC ALLIANCES

     As part of its business strategy, the Company expects to seek to
develop strategic alliances both domestically and internationally and to
acquire assets and businesses or make investments in companies that are
complementary to its current operations.  The Company has no present
commitments or agreements with respect to any such strategic alliance,
investment or acquisition.  Any such future strategic alliances,
investments or acquisitions would be accompanied by the risks commonly
encountered in strategic alliances with or acquisitions of or investments
in companies.  Such risks include, among other things, the difficulty of
assimilating the operations and personnel of the companies, the potential
disruption of the Company's ongoing business, the inability of management
to maximize the financial and strategic position of the Company by the
successful incorporation of licensed or acquired technology and rights into
the Company's service offerings, the maintenance of uniform standards,
controls, procedures and policies and the impairment of relationships with
employees and customers as a result of changes in management.  In addition,
the Company has experienced higher attrition rates with respect to
customers obtained through acquisitions, and may continue to experience
higher attrition rates with respect to any customers resulting from future
acquisitions.  Moreover, to the extent that any such acquisition,
investment or alliance involved a business located outside the United
States, the transaction would involve the risks associated with
international expansion.  See "-Risks Associated with International
Expansion." There can be no assurance that the Company would be successful
in overcoming these risks or any other problems encountered with such
strategic alliances, investments or acquisitions.

     In addition, if the Company were to proceed with one or more
significant strategic alliances, acquisitions or investments in which the
consideration consists of cash, a substantial portion of the Company's
available cash (including proceeds of this offering) could be used to
consummate the strategic alliances, acquisitions or investments.  If the
Company were to consummate one or more significant strategic alliances,
acquisitions or investments in which the consideration consists of stock,
shareholders of the Company could suffer a significant dilution of their
interests in the Company.  Many of the businesses that might become
attractive acquisition candidates for the Company may have significant
goodwill and intangible assets, and acquisitions of these businesses, if
accounted for as a purchase, would typically result in substantial
amortization charges to the Company.  The financial impact of acquisitions,
investments and strategic alliances could have a material adverse effect on
the Company's business, financial condition and results of operations and
could cause substantial fluctuations in the Company's quarterly and yearly
operating results.

TECHNOLOGICAL CHANGES MAY ADVERSELY AFFECT COMPETITIVENESS AND FINANCIAL
RESULTS

     The telecommunications industry is characterized by rapid and
significant technological advancements and introductions of new products
and services utilizing new technologies.  There can be no assurance that
the Company will maintain competitive services or that the Company will
obtain appropriate new technologies on a timely basis or on satisfactory
terms.

DEPENDENCE ON KEY PERSONNEL

     The Company's success depends to a significant degree upon the
continued contributions of its management team and technical, marketing and
sales personnel.  The Company's employees may voluntarily terminate their
employment with the Company at any time.  Competition for qualified
employees and personnel in the telecommunications industry is intense and,
from time to time, there are a limited number of persons with knowledge of
and experience in particular sectors of the telecommunications industry. 
The Company's success also will depend on its ability to attract and retain
qualified management, marketing, technical and sales executives and
personnel.  The process of locating such personnel with the combination of
skills and attributes required to carry out the Company's strategies is
often lengthy.  The loss of the services of key personnel, or the inability
to attract additional qualified personnel, could have a material adverse
effect on the Company's results of operations, development efforts and
ability to expand.  There can be no assurance that the Company will be
successful in attracting and retaining such executives and personnel.  Any
such event could have a material adverse effect on the Company's business,
financial condition and results of operations.

RISK ASSOCIATED WITH FINANCING ARRANGEMENTS; DIVIDEND RESTRICTIONS

     The Company's financing arrangements are secured by substantially all
of the Company's assets and require the Company to maintain certain
financial ratios and restrict the payment of dividends, and the Company
anticipates that it will not pay any dividends on Class A Common Stock in
the foreseeable future.  These financial arrangements will require the
repayment of significant amounts and significant reductions in borrowing
capacity thereunder during the next five years.  The Company's secured
lenders would be entitled to foreclose upon those assets in the event of a
default under the financing arrangements and to be repaid from the proceeds
of the liquidation of those assets before the assets would be available for
distribution to the Company's other creditors and shareholders in the event
that the Company is liquidated.  In addition, the collateral security
arrangements under the Company's existing financing arrangements may
adversely affect the Company's ability to obtain additional borrowings or
other capital.  The Company may need to raise additional capital from
equity or debt sources to finance its projected growth and capital
expenditures contemplated for periods after 1996.  See "Substantial
Indebtedness; Need for Additional Capital."

HOLDING COMPANY STRUCTURE; RELIANCE ON SUBSIDIARIES FOR DIVIDENDS

     ACC Corp. is a holding company, the principal assets of which are its
operating subsidiaries in the U.S., Canada and the U.K. ACC Canada, a 70%
owned subsidiary of ACC Corp., is a public company listed on the Toronto
Stock Exchange and the Montreal Stock Exchange.  The ability of ACC Canada
to declare and pay dividends is restricted by the terms of the agreement
under which the Company's Series A Preferred Stock was issued.  In
addition, ACC Canada's ability to make other payments to ACC Corp. and its
other subsidiaries may be dependent upon the taking of action by ACC
Canada's Board of Directors, applicable Canadian and provincial law and
stock exchange regulations, in addition to the availability of funds.  At
the present time, three of ACC Canada's seven directors are representatives
of ACC Corp. ACC Corp's percentage ownership interest in ACC Canada may
decrease over time as a result of stock issuances or sales or,
alternatively, may increase over time as a result of stock purchases,
investments or other transactions.  ACC U.S., ACC Canada, ACC U.K. and
other operating subsidiaries of the Company are subject to corporate law
restrictions on their ability to pay dividends to ACC Corp. There can be no
assurance that ACC Corp. will be able to cause its operating subsidiaries
to declare and pay dividends or make other payments to ACC Corp. when
requested by ACC Corp. The failure to pay any such dividends or make any
such other payments could have a material adverse effect upon the Company's
business, financial condition and results of operations.

POTENTIAL VOLATILITY OF STOCK PRICE

     The market price of the Class A Common Stock has been and may continue
to be, highly volatile.  Factors such as variations in the Company's
revenue, earnings and cash flow, the difference between the Company's
actual results and the results expected by investors and analysts and
announcements of new service offerings, marketing plans or price reductions
by the Company or its competitors could cause the market price of the Class
A Common Stock to fluctuate substantially.  In addition, the stock markets
recently have experienced significant price and volume fluctuations that
particularly have affected telecommunications companies and resulted in
changes in the market prices of the stocks of many companies that have not
been directly related to the operating performance of those companies. 
Such market fluctuations may materially adversely affect the market price
of the Class A Common Stock.

RISKS ASSOCIATED WITH DERIVATIVE FINANCIAL INSTRUMENTS

     In the normal course of business, the Company uses various financial
instruments, including derivative financial instruments, to hedge its
foreign exchange and interest rate risks.  The Company does not use
derivative financial instruments for speculative purposes.  By their
nature, all such instruments involve risk, including the risk of
nonperformance by counterparties, and the Company's maximum potential loss
may exceed the amount recognized on the Company's balance sheet. 
Accordingly, losses relating to derivative financial instruments could have
a material adverse effect upon the Company's business, financial condition
and results of operations.

