
                                 FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

  


(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 OR

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______

COMMISSION FILE NUMBER  0-14567


                                   ACC CORP.
            (Exact name of registrant as specified in its charter)


             Delaware                         16-1175232
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)            Identification No.)


                  400 West Avenue, Rochester, New York  14611
                   (Address of principal executive offices)


                                (716) 987-3000
             (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   X                      No

As of  November 1, 1996, the Registrant had issued and outstanding 16,521,691
shares of its Class A Common Stock, par value $.015 per share, and 0 shares of
its Series A Preferred Stock.

The Index of Exhibits filed with this Report is found at Page 24.
<PAGE>




PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS


<PAGE>
<TABLE>    
<CAPTION>  
                                 ACC CORP. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF OPERATIONS
                                        (UNAUDITED)
                      (Amounts in thousands, except share and per share data)

                              Three months ended         Nine months ended
                                 September 30,              September 30,
                               1996        1995           1996          1995
                             ____________ ___________   ____________  _____________
<S>                          <C>          <C>           <C>          <C>
Revenue:
   Toll revenue              $     70,226 $    42,322   $    206,362  $    119,268
    Local service and other         7,059       3,589         17,865         7,973
                             ____________ ___________   ____________  ____________
                                   77,285      45,911        224,227       127,241

Network costs                      48,815      28,105        143,803        79,163
                             ____________ ___________   ____________  ____________
Gross profit                       28,470      17,806         80,424        48,078

Other operating expenses:
  Depreciation and amortiza-
     tion                           4,266       3,011         12,061         8,405
  Selling, general and 
    administrative                 20,995      15,159         58,977        41,345
                             ____________ ___________   ____________  ____________
                                   25,261      18,170         71,038        49,750
                             ____________ ___________   ____________  ____________
 Income (loss) from 
   operations                       3,209        (364)         9,386        (1,672)

Other income (expense):
  Interest expense                 (1,015)     (1,396)        (3,908)       (3,812)
  Interest income                     829          56          1,286           146
  Foreign exchange gain 
    (loss)                             22         (14)            48          (109)
                             ____________ ___________   ____________  ____________                             
                                     (164)     (1,354)        (2,574)       (3,775)
                             ____________ ___________   ____________  ____________
 Income (loss) before 
   provision for income
   taxes and minority 
   interest                         3,045      (1,718)         6,812        (5,447)

 Provision for  income taxes          543         249          1,396           538
                             ____________ ___________   ____________  ____________
 Income (loss) before 
   minority interest                2,502      (1,967)         5,416        (5,985)

Minority interest in (income) 
  loss of
  consolidated subsidiary            (303)        118           (899)          225
                             ____________ ___________   ____________  ____________ 
 Net income (loss)                  2,199      (1,849)         4,517        (5,760)
 Less Series A 
    preferred stock dividend         (334)        -           (1,022)          -
 Less Series A preferred 
    stock accretion                  (872)        -           (1,496)          -
                             ____________ ___________   ____________  ____________

 Income (loss) applicable 
   to common stock           $        993 $    (1,849)  $      1,999  $     (5,760)
                             ____________ ___________   ____________  ____________
Net income (loss) per common
  & common equivalent share  $       0.06 $     (0.15)  $       0.13  $      (0.50)
                             ____________ ___________   ____________  ____________
Average number of common
 and common equivalent 
 shares (Note 7)               16,694,546  11,967,338     14,984,299    11,464,761
                             ____________ ___________   ____________  ____________
</TABLE>

<PAGE>
<TABLE>                 
<CAPTION>
                 ACC CORP. AND SUBSIDIARIES
                CONSOLIDATED BALANCE SHEETS
         (Amounts in thousands, except share data)


                                          September 30,    December 31,
                                              1996             1995
                                          _____________    ____________                                                   
                                          (unaudited)
<S>                                      <C>               <C>
Current assets:
 Cash and cash equivalents               $  23,122         $    518
 Accounts receivable, net of allowance
  for doubtful accounts of $3,889 in
  1996 and $2,085 in 1995                   53,327           38,978
 Other receivables                           2,600            3,965
 Prepaid expenses and other assets           3,517            2,265
                                           ________         _______
  Total current assets                      82,566           45,726
                                           ________         _______
Property, plant and equipment:
 At cost                                    98,686           83,623
 Less-accumulated depreciation and
  amortization                             (35,121)         (26,932)
                                           ________         _______
                                            63,565           56,691
                                           ________         _______

Other assets:
 Goodwill and customer base, net            16,448           14,072
 Deferred installation costs, net            3,664            3,310
 Other                                       6,823            4,185
                                           ________         _______
                                            26,935           21,567
                                           ________         _______
   Total assets                           $173,066         $123,984

Current liabilities:
 Notes payable                            $    -           $  1,966
 Current maturities of
  long-term debt                             3,151            2,919
 Accounts payable                            6,890            7,340
 Accrued network costs                      25,937           28,192
 Other accrued expenses                     16,345           15,657
                                           ________        ________
   Total current liabilities                52,323           56,074
                                           ________        ________
Deferred income taxes                        2,939            2,577
                                           ________        ________
Long-term debt                               6,884           28,050
                                           ________        ________
Redeemable Series A Preferred Stock, $1.00
par value, $1,000 liquidation value,
cumulative, convertible, Authorized-
10,000 shares; Issued - 10,000 shares       11,929            9,448
                                           ________         _______
Minority interest                            2,527            1,428
                                           ________         _______
Shareholders' equity (Note 7):
 Preferred Stock, $1.00 par value,
 Authorized - 1,990,000 shares;
 Issued - no shares                             -                -
 Class A Common Stock, $.015 par value
  Authorized - 50,000,000 shares;
  Issued - 16,464,284 in 1996 and
  12,925,889  in 1995                          247              194
 Class B Common Stock, $.015 par value,
  Authorized - 25,000,000 shares;
  Issued - no shares                            -                -
 Capital in excess of par value             98,319           32,846
 Cumulative translation adjustment            (936)            (950)
 Retained earnings (deficit)                   444           (4,073)
                                           ________         _______
                                            98,074           28,017
 Less-
 Treasury stock, at cost (1,089,884
   shares)                                  (1,610)          (1,610)
                                           _______          _______
   Total shareholders' equity               96,464           26,407
                                           _______          _______
    Total liabilities and
    shareholders' equity                  $173,066         $123,984
                                          ________         ________ 
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                        ACC CORP AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)
                  (Amounts in 000's, except per share data)

                                                 FOR THE NINE MONTHS ENDED
                                                      SEPTEMBER 30,
                                                  1996                1995
                                                __________         ___________
<S>                                            <C>                <C>
Cash flows from operating activities:
 Net income (loss)                               $ 4,517            ($5,760)
                                                __________         ___________ 
 Adjustments to reconcile net income to 
     net cash provided by operating activities:
   Depreciation and amortization                  12,061              8,405
   Deferred income taxes                             362                515
   Minority interest in income of 
       consolidated subsidiary                       899               (225)
   Unrealized foreign exchange (gain) loss          (137)               430
   Amortization of deferred financing costs          316                165
   Loss on disposal of equipment                      -                 193
   (Increase)decrease in assets:
      Restricted cash                                 -                  -
      Accounts receivable, net                   (14,225)           (10,040)
      Other receivables                            1,653                252
      Prepaid and other assets                    (1,228)              (329)
      Deferred installation costs                 (1,943)            (1,160)
      Other                                         (390)               415
   Increase(decrease) in liabilities:
      Accounts payable                              (371)            (8,217)
      Accrued network costs                       (2,326)            15,041
      Other accrued expenses                        (780)             3,305
                                                ___________        __________
       Total adjustments                          (6,109)             8,750
                                                ___________        __________
        Net cash provided by (used in)
          operating activities                    (1,592)             2,990
                                                ___________        __________
Cash flows from investing activities:
   Capital expenditures, net                     (14,865)            (8,709)
   Payment for purchase of subsidiary,
      net of cash acquired                           -               (1,386)
   Cash paid for acquisition of customer base     (2,226)              (229)
                                                __________         __________ 
        Net cash used in investing activities    (17,091)           (10,324)
                                                __________         __________
Cash flows from financing activities:
  Borrowings under lines of credit                19,500             (7,602)
  Repayments under lines of credit               (40,413)                -
  Repayment of notes payable                      (2,586)                -
  Repayment of long-term debt                     (2,841)            (1,734)
  Proceeds from issuance of common stock          68,476             11,395
  Proceeds from issuance of preferred stock          -               10,000
  Financing costs                                   (441)            (2,807)
  Dividends paid                                     -                 (440)
                                                __________         __________ 
    Net cash provided by financing activities     41,695              8,812

Effect of exchange rate changes on cash             (408)              (827)
                                                __________         __________
Net increase in cash from operations              22,604                651

Cash and cash equivalents at beginning 
   of period                                         518              1,021
                                                __________         __________
Cash and cash equivalents at end of period        $23,122            $1,672
                                                __________         __________
Supplemental disclosures of cash flow 
   information:
Cash paid during the period for:
  Interest                                         $2,326             $2,831
                                                __________         __________
  Income taxes                                     $1,033               $103
                                                __________         __________
Supplemental schedule of noncash 
   investing activities:
  Equipment purchased through capital leases       $2,775             $2,995
                                                __________         __________
  Purchase of subsidiary with 
     short-term notes payable                         -               $2,966
                                                __________         __________
</TABLE>
<PAGE>


ACC CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

September 30, 1996


1.        STATEMENT OF MANAGEMENT

          The condensed financial statements of ACC Corp. and
subsidiaries (the "Company") included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC").  Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the
information presented not misleading.  It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's latest Annual
Report on Form 10-K.

          The interim financial statements contained herein reflect all
adjustments of a normal recurring nature which are, in the opinion of
management, necessary to a fair statement of the results of operations
for the interim periods presented.

          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 approximately 70% (93% as of October, 1996) owned Canadian
subsidiary ("ACC Canada"), and ACC Long Distance UK Ltd. ("ACC U.K.").
In this Form 10-Q, references to "dollar" and "$" are to United States
dollars, references to "Cdn. $" are to Canadian dollars, references to
"<pound-sterling>" 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.

2.        FORM 10-K

          Reference is made to the following footnotes included in the
Company's 1995 Annual Report on Form 10-K:

          Principles of Consolidation
          Sale of Subsidiary Stock
          Toll Revenue
          Other Receivables
          Property, Plant and Equipment
          Deferred Installation Costs
          Goodwill and Customer Base
          Common and Common Equivalent Shares
          Foreign Currency Translation
          Income Taxes
          Cash Equivalents and Restricted Cash
          Derivative Financial Instruments
          Use of Estimates
          Reclassifications
          Operating Information
          Discontinued Operations
          Asset Write-down
          Equal Access Costs
          Debt
          Senior Credit Facility and Lines of Credit
          Income Taxes
          Redeemable Preferred Stock
          Equity
          Private Placement
          Employee Long Term Incentive Plan
          Employee Stock Purchase Plan
          Treasury Stock
          Commitments and Contingencies
          Operating Leases
          Employment and Other Agreements
          Purchase Commitment
          Defined Contribution Plans
          Annual Incentive Plan
          Legal Matters
          Geographic Area Information
          Related Party Transactions
          Subsequent Events

3.        NET INCOME PER SHARE

          Net income per common and common equivalent share is computed
on the basis of the weighted average number of common and common
equivalent shares outstanding during the period and net income reduced by
preferred dividends and accreted costs.  The average number of shares
outstanding (adjusted for a three-for-two stock split - see Note 7) is
computed as follows:

                              For the Nine Months      For the Three Months
                              ENDED SEPTEMBER 30,       ENDED SEPTEMBER 30,
                              --------------------     ---------------------
                               1996          1995      1996           1995
Average Number Outstanding:   

Common Shares               13,767,380    11,217,241  15,315,633  11,645,924
Common Equivalent Shares     1,216,919       247,520   1,378,913     321,414
                            ----------    ----------  ----------- ----------
TOTAL                       14,984,299    11,464,761  16,694,546  11,967,338

Fully diluted income per share amounts are not presented for any period
because inclusion of these amounts would be anti-dilutive.


4.   SFAS NO. 123

     The Company is required to adopt SFAS No. 123,  Accounting for
Stock-Based Compensation  in 1996.  This Statement encourages entities to
adopt a fair value based method of accounting for employee stock option
plans (whereby compensation cost is measured at the grant date based on
the value of the award and is recognized over the employee service
period) rather than the current intrinsic value based method of
accounting (whereby compensation cost is measured at the grant date as
the difference between market value and the price for the employee to
acquire the stock).  If the Company elects to continue using the
intrinsic value method of accounting, pro forma disclosures of net income
and earnings per share, as if the fair value based method of accounting
had applied, will need to be disclosed.  Management has decided that the
Company will not adopt the fair value based method of accounting for the
Company's stock option plans and will include the required pro forma
disclosures in the annual financial statements.

5.   COMMON STOCK OFFERINGS

     In May 1996, the Company completed a public offering of 3,018,750
shares of its Class A Common Stock at a price of $22.50 per share. The
offering raised net proceeds of $63.1 million, after deduction of fees
and expenses of $4.8 million.

     In October 1996, the Company completed a public offering of
1,194,722 shares of its Class A Common Stock, on behalf of selling
shareholders, at a price of $45 per share.  937,500 of the shares
resulted from the conversion to Class A Common Stock of all of the
outstanding Series A Preferred Stock. Additionally, outstanding warrants
to purchase the Company's Class A Common Stock were exercised by the
warrant holders and the underlying shares of Class A Common Stock were
sold. The Company received the exercise price of the warrants and stock
options, approximately $2.1 million, but the proceeds from the offering
were received by the selling shareholders.  Had the conversion of the
Series A Preferred Stock occurred at the beginning of the quarter and the
year to date period, the proforma earnings per share for the three and
nine months ended September 30, 1996 would have been $0.12 and $0.28,
respectively.

6.   ACQUISITION

     As of May 13, 1996, the Company, through its 70% owned subsidiary
ACC TelEnterprises Ltd., purchased certain assets of Internet Canada
Corp., a company based in Toronto, Canada, which is engaged in the
business of providing internet access and home page design and
development.  The purchase price was Cdn. $3.0 million plus additional
amounts to be calculated based on the number of customer subscribers at
various dates, with the total not to exceed Cdn. $7.0 million.  As of
October 31, 1996, Cdn. $4.2 million has been paid.

7.   STOCK SPLIT

     On July 14, 1996, the Company's Board  of  Directors authorized a
three-for-two stock split, in the form of a stock dividend issued on
August 8, 1996, of the Company's Class A Common Stock to shareholders of
record as of July 3, 1996.  Share and per share amounts in the
accompanying financial statements and footnotes have been adjusted for
the split.

1. MINORITY INTEREST REPURCHASE

     During the quarter, the Company made a cash tender offer of Cdn.
$21.50 per share (total purchase price of Cdn. $49.4 million or US $36.0
million) for the repurchase of the minority-held shares of ACC
TelEnterprises Ltd.  As of the beginning of the quarter, the Company
owned approximately 70% of the issued and outstanding common shares of
ACC TelEnterprises Ltd. and the remaining common shares were publicly
held.  In September, 1996, the tender offer was approved by the Boards of
Directors of both companies.

     In October, 1996, 1.8 million of the outstanding shares,
representing approximately 80% of the minority interest, were tendered
and purchased by the Company, increasing the Company's ownership in ACC
Canada to 93%.  As fewer than 90% of the publicly held shares (on a fully
diluted basis) were deposited under the tender offer, the Company intends
to consider other transactions that will result in ACC TelEnterprises
becoming a wholly-owned subsidiary of the Company.  The Company has
formed a subsidiary which will amalgamate with ACC Canada, subject to
majority approval by shareholders.  The Company will be able to vote the
shares acquired in the tender offer.  The Company expects to have fully
acquired the minority interest by the end of the fourth quarter of 1996.

2. SUBSEQUENT EVENTS

     In October, 1996, the Company's Chief Executive Officer was elected
Chairman of the Board of Directors of the Company. The former Chairman
resigned to pursue other entrepreneurial interests, but will remain a
director and employee of the Company. If the former Chairman's employment
with the Company were to terminate, he would be entitled to receive from
the Company a payment of $1 million, payable in three equal annual
installments, subject to the terms and conditions of his employment
agreement.

     The Company has received a commitment letter from a financial
institution to provide a $100 million credit facility to the Company,
which will amend and restate the current $35 million credit facility.
The Company expects to execute definitive credit documents and close on
the new credit facility in the fourth quarter.  The Company anticipates
that the new credit facility will be syndicated among several financial
institutions.  The facility will provide additional working capital,
capital for acquisitions, and will contain generally more flexible terms
and conditions than the current credit facility.  If the facility is
closed in the fourth quarter of 1996, the maximum aggregate principal
amount of the new facility would be required to be reduced by $8 million
per quarter commencing on December 31, 1998 until September 30, 2000, and
by $9 million per quarter commencing on December 31, 2000 until maturity
of the loan in October 2001.


<PAGE>
      

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
 CONDITION AND RESULTS OF OPERATIONS


     The following discussion includes certain forward-looking
statements.  Such forward-looking statements are subject to material
risks and uncertainties and other factors.  For a discussion of material
risks and uncertainties and other factors that could cause actual results
to differ materially from the forward-looking statements, see "Recent
Losses; Potential Fluctuations in Operating Results," "Substantial
Indebtedness; Need for Additional Capital," "Dependence on Transmission
Facilities-Based Carriers and Suppliers," "Potential Adverse Effects of
Regulation," "Increasing Domestic and International Competition," "Risks
of Growth and Expansion," "Risks Associated with International
Operations," "Dependence on Effective Information Systems," "Risks
Associated With Acquisitions, Investments and Strategic Alliances,"
"Technological Changes May Adversely Affect Competitiveness and Financial
Results," "Dependence on Key Personnel," "Risks Associated with Financing
Arrangements; Dividend Restrictions," "Holding Company Structure;
Reliance on Subsidiaries for Dividends,"  "Potential Volatility of Stock
Price" and "Risks Associated with Derivative Financial Instruments"
included under the caption "Company Risk Factors" in Exhibit 99.1 hereto,
which is incorporated by reference herein, and the Company's periodic
reports and other documents filed with the SEC.

GENERAL

     The Company's revenue is comprised of toll revenue and local service
and other revenue.  Toll revenue consists of revenue derived from ACC's
long distance and operator-assisted services.  Local service and other
revenue consists of revenue derived from the resale of local exchange
services, data line services, direct access lines and monthly
subscription fees.  Network costs consist of expenses associated with the
leasing of transmission lines, access charges and certain variable costs
associated with the Company's network.  The following table shows the
total revenue (net of intercompany revenue) and billable long distance
minutes of use attributable to the Company's U.S., Canadian and U.K.
operations during the three and nine month periods ended September 30,
1996 and 1995:
                                          THREE MONTHS ENDED SEPTEMBER 30,
                                  -------------------------------------------
                                           1996                  1995

                                        (Dollars and minutes in thousands)
                                  AMOUNT       PERCENT     AMOUNT     PERCENT
                                  -------      -------    --------    -------
Total Revenue:
United States                    $ 23,107       29.9%     $ 15,291      33.3%
Canada                             29,804       38.6%       20,547      44.8%
United Kingdom                     24,374       31.5%       10,073      21.9%
                                  --------     --------   ---------   -------
      Total                      $ 77,285      100.0%     $ 45,911     100.0%

BILLABLE LONG DISTANCE MINUTES OF USE:
United States                     142,157       31.3%      119,399       41.7%
Canada                            170,667       37.6%      120,585       42.2%
United Kingdom                    141,452       31.1%       46,119       16.1%
                                 ---------      -----      --------      -----
     Total                        454,276      100.0%      286,103      100.0%



                                          NINE MONTHS ENDED SEPTEMBER 30,
                                          --------------------------------
                                           1996                  1995
                                  ---------------------   ------------------
                                        (Dollars and minutes in thousands)
                                  AMOUNT       PERCENT    AMOUNT      PERCENT
                                  -------      -------    -------     -------
Total Revenue:
United States                    $ 71,840        32.0%     $43,863      34.5%
Canada                             87,370        39.0%      59,737      46.9%
United Kingdom                     65,017        29.0%      23,641      18.6%
                                 ---------      -------   ---------    ------
      Total                      $224,227       100.0%    $127,241     100.0%

BILLABLE LONG DISTANCE MINUTES OF USE:
United States                     417,607        32.4%     343,813      41.6%
Canada                            497,870        38.6%     376,829      45.5%
United Kingdom                    374,315        29.0%     106,605      12.9%
                                  -------       ------     --------     -----
     Total                      1,289,792       100.0%     827,247     100.0%




     The following table presents certain information concerning toll
revenue per billable long distance minute and network cost per billable
long distance minute attributable to the Company's U.S., Canadian and
U.K. operations during the three and nine month periods ended September
30, 1996 and 1995:



<PAGE>
      
                                   THREE MONTHS ENDED  NINE MONTHS ENDED
                                   ------------------  -----------------
                                                     September 30,
                                   1996       1995        1996      1995
                                   ------     ------      -----    -----
TOLL REVENUE PER BILLABLE LONG DISTANCE MINUTE:
United States                       $.141      $.121       $.155   $.119
Canada                               .152       .149        .154    .145
United Kingdom                       .172       .215        .173    .220


NETWORK COST PER BILLABLE LONG DISTANCE MINUTE:
United States                       $.100      $.069       $.109   $.069
Canada                               .108       .107        .110    .102
United Kingdom                       .114       .152        .117    .159

     The Company believes that its historic revenue growth as well as its
historic network costs and results of operations for its Canadian and
U.K. operations generally reflect the state of development of the
Company's operations, the Company's customer mix and the competitive and
deregulatory environment in those markets.  For U.S. operations, 1996
revenue and network cost per minute have been increased by non-recurring
international carrier sales in the second quarter of 1996.  The Company
believes that toll revenue per billable minute and network cost per
billable minute will be lower in future periods, due to competitive
pressures.  The Company entered the U.S., Canadian and U.K.
telecommunications markets in 1982, 1985 and 1993, respectively.

     Deregulatory influences have affected the telecommunications
industry in the U.S. since 1984 and the U.S. market has experienced
considerable competition for a number of years. The competitive
influences on the pricing of ACC U.S.'s services and network costs have
been stabilizing during the past few years.  This may change in the
future as a result of recent U.S. legislation that further opens the
market to competition, particularly from the regional operating companies
("RBOCs").  The Company expects competition based on price and service
offerings to increase.

     The deregulatory trend in Canada, which commenced in 1989, has
increased competition.  ACC Canada experienced significant downward
pressure on the pricing of its services during 1994.  Although revenue
per minute has increased from 1995 to 1996 due to changes in customer and
product mix, the Company expects such downward pressure to continue,
however it is expected that the pricing pressure may abate over time as
the market matures.  The impact of this pricing pressure on revenues of
ACC Canada is being offset by an increase in the Canadian residential and
student billable minutes of usage as a percentage of total Canadian
billable minutes of usage, and introduction of new products and services
including 800 service, local exchange resale, and internet services. Toll
revenue per billable minute attributable to residential and student
customers in Canada generally exceeds the toll revenue per billable
minute attributable to commercial customers.  The Company expects that,
based on existing and anticipated regulations and rulings, its Canadian
contribution charges (access charges to originate calls from and
terminate calls in the local exchange telephone network)  will increase
by up to approximately Cdn. $2.0 million in 1997 over 1996 levels, which
the Company will seek to offset with increased volume efficiencies, and
additional reductions in contribution rates may also offset this
increase.  The Company also believes that its network costs per billable
minute in Canada may decrease during periods after 1996 if there is an
anticipated increase in long distance transmission facilities available
for lease from Canadian transmission facilities-based carriers as a
result of expected growth in the number and capacity of transmission
networks in that market.  The foregoing forward-looking statements are
based upon expectations of actions that may be taken by third parties,
including Canadian regulatory authorities and transmission facilities-
based carriers.  If such third parties do not act as expected, the
Company's actual results may differ materially from the foregoing
discussion.

     The Company believes that, because deregulatory influences have only
fairly recently begun to impact the U.K. telecommunications industry, the
Company will continue to experience a significant increase in revenue
from that market during the next several quarters.  The foregoing belief
is based upon expectations of actions that may be taken by U.K.
regulatory authorities and the Company's competitors; if such third
parties do not act as expected, the Company's revenues in the U.K. might
not increase.  If ACC U.K. were to experience increased revenues, the
Company believes it should be able to enhance its economies of scale and
scope in the use of the fixed cost elements of its network.
Nevertheless, the deregulatory trend in that market is expected to result
in competitive pricing pressure on the Company's U.K. operations which
could adversely affect revenues and margins. Since the U.K. market for
transmission facilities is dominated by British Telecommunications PLC
("British Telecom") and Mercury Communications Ltd. ("Mercury"), the
downward pressure on prices for services offered by ACC U.K. may not be
accompanied by a corresponding reduction in ACC U.K.'s network costs in
the short term and, consequently, could adversely affect the Company's
business, results of operations and financial condition, particularly in
the event revenue derived from the Company's U.K. operations accounts for
an increasing percentage of the Company's total revenue.  Moreover, the
Company's U.K. operations are highly dependent upon the transmission
lines leased from British Telecom. As each of the telecommunications
markets in which it operates continues to mature, the rate of growth in
its revenue and customer base in each such market is likely to decrease
over time.

     Since the commencement of the Company's operations, the Company has
undertaken a program of developing and expanding its service offerings,
geographic focus and network.  In connection with this development and
expansion, the Company has made significant investments in
telecommunications circuits, switches, equipment and software.  These
investments generally are made significantly in advance of anticipated
customer growth and resulting revenue.  The Company also has increased
its sales and marketing, customer support, network operations and field
services commitments in anticipation of the expansion of its customer
base and targeted geographic markets.  The Company expects to continue to
expand the breadth and scale of its network and related sales and
marketing, customer support and operations activities.  These expansion
efforts are likely to cause the Company to incur significant increases in
expenses from time to time, in anticipation of potential future growth in
the Company's customer base and targeted geographic markets.

     The Company's operating results have fluctuated in the past and they
may continue to fluctuate significantly in the future as a result of a
variety of factors, some of which are beyond the Company's control.  The
Company expects to focus in the near term on building and increasing its
customer base, service offerings and targeted geographic markets, which
will require it to increase significantly its expenses for marketing and
development of its network and new services, and may adversely impact
operating results from time to time.  The Company's sales to other long
distance carriers have been increasing due to the Company's marketing
efforts to promote its lower international network costs.  Revenues from
other resellers accounted for approximately 42%, 15% and 24% of the
revenues of ACC U.S., ACC Canada and ACC U.K., respectively, in the third
quarter of 1996 and 45%, 14% and 17% for the nine months ended September
30, 1996. With respect to these customers, the Company competes almost
exclusively on price, does not have long term contracts and generates
lower gross margins as a percentage of revenue. The Company's primary
interest in carrier revenue is to utilize excess capacity on its network.
Management believes that carrier revenue will represent less than 20% of
consolidated total revenue as the core businesses continue to grow.  The
foregoing forward-looking statement is based upon expectations with
respect to growth in the Company's customer base and total revenues.  If
such expectations are not realized, the Company's actual results may
differ materially from the foregoing discussion.


RESULTS OF OPERATIONS

     The following table presents, for the three and nine month periods
ended September 30, 1996 and 1995, certain Statement of Operations data
expressed as a percentage of total revenue{(1)}:

                                  THREE MONTHS ENDED   NINE MONTHS ENDED
                                  ------------------   -----------------
                                             SEPTEMBER 30,
                                  1996         1995     1996       1995
                                  -------     ------    -----      -----
Revenue:
    Toll revenue                     90.9%      92.2%    92.0%     93.7%
    Local service and other           9.1        7.8      8.0       6.3
                                    ------      ------   ------    ------
        Total revenue               100.0       100.0    100.0    100.0
Network costs                        63.2        61.2     64.1     62.2
                                    ------      ------   ------   --------
Gross profit                         36.8        38.8     35.9     37.8
Other operating expenses:
    Depreciation and amortization     5.5         6.6      5.4      6.6
    Selling, general and 
      administrative                 27.2        33.0     26.3     32.5
                                    ------      ------    -----   ------
     Total other operating expenses  32.7        39.6     31.7     39.1

Income (loss) from operations         4.1        (0.8)     4.2     (1.3)
Total other income (expense)         (0.2)       (2.9)    (1.1)    (3.0)
Income (loss) from operations 
  before provision
  for income taxes and minority
  interest                            3.9        (3.7)     3.1     (4.3)
Provision for income taxes             .7          .5       .6       .4
Minority interest in (income) loss   
 of consolidated subsidiary           (.4)         .3     (0.4)      .2
                                     ------     ------    ------   ------
Income (loss) from continuing 
  operations                          2.8%       (3.9)%    2.1%    (4.5)%
                                     ------    --------   ------   ------

(1) Includes the results of operations of Metrowide Communications
acquired on August 1, 1995.

THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THREE MONTHS ENDED
SEPTEMBER 30, 1995

     Revenue.  Total revenue for the three months ended September 30,
1996 increased by 68.4% to $77.3 million from $45.9 million for the same
period in 1995, reflecting growth in toll revenue and local service and
other revenue.  Long distance toll revenue for the 1996 quarter increased
by 66.0% to $70.2 million from $42.3 million in the 1995 quarter.  In the
U.S., long distance toll revenue increased 39.3% as a result of a 19.0%
increase in billable minutes of use, primarily due to increased
international sales to carriers. These international sales have higher
rates per minute, also contributing to the increase in revenue.  In
Canada, long distance toll revenue increased 44.0%, as a result of a
41.5% increase in billable minutes (primarily due to a 40.0% increase in
the number of customer accounts from approximately 160,000 to
approximately 224,000), and an increase in prices due to additional
residential customers which typically have a higher revenue per minute.
In the U.K., long distance toll revenue increased 144.4%, due to
significant volume increases (primarily due to a 187.5% increase in the
number of customer accounts from approximately 16,000 to approximately
46,000), offset by lower prices that resulted from entering the
commercial and residential markets and from competitive pricing pressure.
Since the end of 1994, ACC's revenue per minute on a consolidated basis
has been increasing slightly as a result of the increasing percentage of
U.K. revenues and the Company's  introduction of higher price per minute
products, including international carrier revenue. Exchange rates did not
have a material impact on revenue in either the U.K. or Canada.  At
September 30, 1996, the Company had approximately 382,000 customer
accounts compared to approximately 286,000 customer accounts at September
30, 1995, an increase of 33.6%.

     For the three months ended September 30, 1996, local service and
other revenue increased by 96.7% to $7.1 million from $3.6 million for
the same period in 1995.  This increase was primarily due to the
Metrowide Communications acquisition which occurred on August 1, 1995
(approximately $1.6 million) and operations in upstate New York
(approximately $1.6 million).

     GROSS PROFIT.  Gross profit, defined as revenue less network costs,
for the third quarter increased to $28.5 million from $17.8 million for
the 1995 quarter, primarily due to the increases in revenue discussed
above.
Expressed as a percentage of revenue, gross profit decreased to 36.8% for
the 1996 quarter from 38.8% for the 1995 quarter due to an increase in
lower margin carrier traffic in the U.S, offset partially by improved
margins in Canada due to network efficiencies.

     OTHER OPERATING EXPENSES.  Depreciation and amortization expense
increased to $4.3 million for the third quarter of 1996 from $3.0 million
for the third quarter of 1995.  Expressed as a percentage of revenue,
these costs decreased to 5.5% in 1996 from 6.6% in the 1995 quarter,
reflecting the increase in revenue realized from year to year.  The $1.3
million increase in depreciation and amortization expense was primarily
attributable to assets placed in service throughout 1995 and the first
nine months of 1996, particularly the addition of a switching center in
Manchester, England.   Amortization of approximately $0.3 million
associated with the customer base and goodwill recorded in the Metrowide
Communications and Internet Canada acquisitions also contributed to the
increase.

     Selling, general and administrative expenses for the third quarter
of 1996 were $21.0 million compared with $15.2 million for the third
quarter of 1995.  Expressed as a percentage of revenue, selling, general
and administrative expenses were 27.2% for the third quarter of 1996,
compared to 33.0% for the third quarter of 1995.  The increase in
selling, general and administrative expenses was primarily attributable
to a $3.5 million increase in personnel related costs and a $1.4 million
increase in customer related costs associated with the growth of the
Company's customer bases and geographic expansion in each country.  Also
included in selling, general and administrative expenses for the third
quarter of 1996 was approximately $1.2 million related to the Company's
local service market sector in New York State compared to $0.4 million
for the third quarter of 1995.  The reduction in selling, general and
administrative expenses as a percent of revenue is due to the Company's
growth and increased efficiency.

     OTHER INCOME (EXPENSE).  Interest expense decreased to $1.0 million
for the third quarter of 1996 compared to $1.4 million in 1995, due
primarily to the repayment, in May 1996, of borrowings under the
Company's credit facility.  Interest income increased to $0.8 million for
the 1996 quarter from $0.1 million in the 1995 quarter due to invested
proceeds from the May 1996 Class A Common Stock offering.

     Foreign exchange gains and losses reflect changes in the value of
Canadian and British currencies relative to the U.S. dollar for amounts
borrowed by the foreign subsidiaries from ACC Corp.  The Company
continues to hedge substantially all intercompany loans to foreign
subsidiaries in an attempt to reduce the impact of transaction gains and
losses.  The Company does not engage in speculative foreign currency
transactions.  Due to this hedging, foreign exchange rate changes
resulted in a nominal gain for the third quarter of 1996 compared to a
nominal loss for the same period in 1995.

     Provision for income taxes reflects the anticipated income tax
liability of the Company's U.S. operations based on its pretax income for
the period.  The provision for income taxes  increased during the third
quarter of 1996 compared to the same period in 1995 due to increased
profitability in the U.S business.  The Company does not provide for
income taxes nor recognize a benefit related to income in foreign
subsidiaries due to net operating loss carryforwards generated by those
subsidiaries in prior years.

     Minority interest in (income) loss of consolidated subsidiary
reflects the portion of the Company's Canadian subsidiary's income or
loss attributable to the approximately 30% (approximately 7% subsequent
to October, 1996) of that subsidiary's common stock that is publicly
traded in Canada.  For the third quarter of 1996, minority interest in
income of the consolidated subsidiary was  $0.3 million compared to a
minority interest in loss of consolidated subsidiary of $0.1 million in
the third quarter of 1995.


     The Company's net income for the third quarter of 1996 was $2.2
million, compared to a net loss of  $1.8 million for the third quarter of
1995.   The third quarter 1996 net income resulted primarily from the
Company's operations in Canada (approximately $0.6 million), operations
in the U.S. (approximately $1.3 million) and operations in the U.K.
(approximately $0.3 million).

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1995

     Revenue.  Total revenue for the nine months ended September 30, 1996
increased by 76.3% to $224.2 million from $127.2 million for the same
period in 1995, reflecting growth in both toll revenue and local service
and other revenue.  Long distance toll revenue for 1996 increased by
73.0% to $206.4 million from $119.3 million in 1995. In the U.S., long
distance toll revenue increased 58.2% as a result of a 21.5% increase in
billable minutes of use primarily due to increased international sales to
carriers. These international sales have a higher rate per minute, also
contributing to the revenue increase.  The 1996 results include $9.0
million in non-recurring carrier revenue.  Excluding this non-recurring
revenue, U.S. toll revenue increased 36.3% over the same period in 1995.
In Canada, long distance toll revenue increased 40.0%, as a result of
32.1% increase in billable minutes (primarily due to the previously
mentioned increase in customer accounts) and a slight increase in prices
due to additional residential customers which typically have a higher
revenue per minute.  In the U.K., long distance toll revenue increased
176.0%, due to significant volume increases (due to the previously
mentioned increase in the number of customer accounts), offset by lower
prices that resulted from expanding the commercial and residential
markets and from competitive pricing pressure.  Since the end of 1994,
ACC's revenue per minute on a consolidated basis has been increasing
slightly as a result of the increasing percentage of U.K. revenues and
the Company's introduction of higher price per minute products including
international carrier revenue. In the first half of 1996, revenue per
minute increases have been higher due to the increased sales to carriers.
Exchange rates did not have a material impact on revenue in either the
U.K. or Canada.

     For the nine months ended September 30, 1996, local service and
other revenue increased by 123.8% to $17.9 million from $8.0 million for
the same period in 1995.  This increase was primarily due to the
Metrowide Communications acquisition which occurred on August 1, 1995
(approximately $5.8 million) and operations in upstate New York
(approximately $3.3 million).

     GROSS PROFIT.  Gross profit, defined as revenue less network costs,
for the nine months ended September 30, 1996 increased to $80.4 million
from $48.1 million for the 1995 period, primarily due to the increases in
revenue discussed above. Expressed as a percentage of revenue, gross
profit decreased to 35.9% for the 1996 period from 37.8% for the 1995
period due to an increase in lower margin carrier traffic in the U.S,
offset partially by improved margins in Canada due to network
efficiencies.

     OTHER OPERATING EXPENSES.  Depreciation and amortization expense
increased to $12.1 million for the first nine months of 1996 from $8.4
million for the same period of 1995.  Expressed as a percentage of
revenue, these costs decreased to 5.4% in 1996 from 6.6% in the 1995
period, reflecting the increase in revenue realized from year to year.
The $3.7 million increase in depreciation and amortization expense was
primarily attributable to assets placed in service throughout 1995 and in
the first nine months of 1996, particularly the addition of a switching
center in Manchester, England.   Amortization of approximately $0.8
million associated with the customer base and goodwill recorded in the
Metrowide Communications and Internet Canada acquisitions also
contributed to the increase.

     Selling, general and administrative expenses for the first nine
months of 1996 were $59.0 million compared with $41.3 million for the
same period of 1995.  Expressed as a percentage of revenue, selling,
general and administrative expenses were 26.3% for the first nine months
of 1996, compared to 32.5% for the same period of 1995.  The increase in
selling, general and administrative expenses was primarily attributable
to a $9.9 million increase in personnel related costs and a $5.0 million
increase in customer related costs associated with the growth of the
Company's customer bases and geographic expansion in each country.  Also
included in selling, general and administrative expenses for the first
nine months of 1996 was approximately $3.1 million related to the
Company's local service market sector in New York State compared to $1.3
million for the same period of 1995.  The reduction in selling, general
and administrative expenses as a percent of revenue is due to the
Company's growth and increased efficiency.

     OTHER INCOME (EXPENSE).  Interest expense increased to $3.9 million
for the nine months ended September 30, 1996, from $3.8 million for the
same period in 1995, as a result of the accrual of the $2.1 million
interest payment due to the credit facility lenders, offset by the
interest expense incurred with the subordinated debt in 1995. Interest
income increased to $1.3 million for the nine months ended September 30,
1996 compared to $0.1 million for the same period in 1995, due to the
invested proceeds from the May 1996 Class A Common Stock offering.

     Foreign exchange gains and losses reflect changes in the value of
Canadian and British currencies relative to the U.S. dollar for amounts
borrowed by the foreign subsidiaries from ACC Corp.  The Company
continues to hedge substantially all intercompany loans to foreign
subsidiaries in an attempt to reduce the impact of transaction gains and
losses.  The Company does not engage in speculative foreign currency
transactions.  Due to this hedging, foreign exchange rate changes
resulted in a nominal gain for the first nine months of 1996 compared to
a nominal loss for the same period in 1995.

     Provision for income taxes reflects the anticipated income tax
liability of the Company's U.S. operations based on its pretax income for
the period.  The provision for income taxes  increased during the first
nine months of 1996 compared to the same period in 1995 due to increased
profitability in the U.S business.  The Company does not provide for
income taxes nor recognize a benefit related to income in foreign
subsidiaries due to net operating loss carryforwards generated by those
subsidiaries in prior years.

     Minority interest in (income) loss of consolidated subsidiary
reflects the portion of the Company's Canadian subsidiary's income or
loss attributable to the approximately 30% (7% subsequent to October,
1996) of that subsidiary's common stock that is publicly traded in
Canada.  For the first nine months of 1996, minority interest in income
of the consolidated subsidiary was  $0.9 million compared to a minority
interest in loss of consolidated subsidiary of $0.2 million for the same
period of 1995.

     The Company's net income for the first nine months of 1996 was $4.5
million, compared to a net loss of  $5.8 million for the same period of
1995.   The 1996 net income resulted primarily from the Company's
operations in Canada (approximately $2.1 million), and operations in the
U.S. (approximately $2.9 million) offset by net losses in the U.K.
(approximately $0.5 million).

LIQUIDITY AND CAPITAL RESOURCES

     In May, 1996, the Company raised net proceeds of $63.1 million
through the issuance of 3,018,750 million shares of its Class A Common
Stock.  The proceeds from this offering were used to reduce all
indebtedness under the Company's credit facility and to finance the
repurchase of the minority interest in ACC Canada, and will also be used
for working capital needs.  Historically, the Company has satisfied its
working capital requirements through cash flow from operations, through
borrowings and financings from financial institutions, vendors and other
third parties, and through the issuance of securities.  The Company also
received net proceeds of approximately $2.1 million from the exercise of
options and warrants associated with the Class A Common Stock offering on
behalf of selling shareholders in October, 1996.

     Net cash flows used in operations were $1.6 million for the nine
months ended September 30, 1996 compared to net cash provided by
operations of $3.0 million for the same period in 1995.  The decrease of
$4.6 million primarily resulted from payments of previously accrued
network bills, particularly in the U.K., offset by a significant increase
in accounts receivable resulting from the expansion of the Company's
carrier segment revenue and customer base and related revenues in all
business segments.  The Company has a carrier customer with a significant
accounts receivable balance.  The Company has entered into a traffic
exchange agreement with the customer, under which the Company terminates
traffic over the customer's network as payment in kind for the
accumulated receivable balance.  The receivable balance was approximately
$8.3 million at the beginning of the arrangement, but has been reduced to
approximately $4.0 million as of the end of October, 1996.  Although the
Company expects to have fully received the balance by the end of the
first quarter of 1997, there are no assurances that the customer will be
financially viable until that time.  

     Net cash flows used in investing activities were $17.1 million and
$10.3 million for the nine months ended September 30, 1996 and 1995,
respectively.  The increase of approximately $6.8 million in net cash
flow used in investing activities during 1996 as compared to 1995 was
primarily attributable to an increase in capital expenditures incurred by
the U.S. operation for local service (approximately $1.9 million), for
computer software ($1.8 million), and for the purchase of assets and
customer base from Internet Canada.

     Accounts receivable increased by 36.8% at September 30, 1996 as
compared to December 31, 1995 as a result of expansion of the Company's
customer base due to sales and marketing efforts.

     The Company's principal need for working capital is to meet its
selling, general and administrative expenses as its business expands.  In
addition, the Company's capital resources have been used for the
Metrowide Communications and Internet Canada acquisitions, capital
expenditures, various customer base acquisitions, prior to the
termination thereof during the third quarter of 1995, payments of
dividends to holders of its Class A Common Stock, and, subsequent to the
end of the quarter, the repurchase of the minority interest in ACC
Canada.  The Company has had a working capital deficit at the end of the
last several years but, at September 30, 1996, the Company had a working
capital surplus of approximately $30.2 million compared to a deficit of
approximately $10.3 million at December 31, 1995, due to the receipt of
the proceeds from the Class A Common Stock offering in May, 1996.  The
working capital surplus that existed at September 30, 1996 was reduced in
October, 1996 when a significant portion of the minority held shares in
ACC TelEnterprises was purchased.

     The Company anticipates that, throughout the remainder of 1996, its
capital expenditures will be approximately $10.0 million for the
expansion of its network, the acquisition, upgrading and development of
switches and other telecommunications equipment as conditions warrant,
the development, licensing and integration of its management information
system and other software, the development and expansion of its service
offerings and customer programs and other capital expenditures. ACC
expects that it will continue to make significant capital expenditures
during future periods, particularly for switching equipment for the UK
(located in Bristol) and for local exchange switches in New York, New
York; White Plains, New York; Boston, Massachusetts; and Springfield,
Massachusetts.  The Company's actual capital expenditures and cash
requirements will depend on numerous factors, including the nature of
future expansion (including the extent of local exchange services, which
is particularly capital intensive), and acquisition opportunities,
economic conditions, competition, regulatory developments, the
availability of capital and the ability to incur debt and make capital
expenditures under the terms of the Company's financing arrangements.

     The Company is obligated to pay the lenders under the credit
facility a contingent interest payment based on the appreciation in
market value of 140,000 shares of the Company's Class A Common Stock from
$9.95 per share, subject to a minimum of $0.75 million and a maximum of
$2.1 million.  The payment is due upon the earlier of (i) January 21,
1997, (ii) any material amendment to the credit facility, (iii) the
signing of a letter of intent to sell the Company or any material
subsidiary, or (iv) the cessation of active trading of the Company's
Class A Common Stock on other than a temporary basis.  The Company is
accruing this obligation over the 18-month period ending January 21, 1997
($1.7 million has been accrued through September 30, 1996).

     As of September 30, 1996, the Company had approximately $23.1
million of cash and cash equivalents and maintained the $35.0 million
credit facility, subject to availability under a borrowing base formula
and certain other conditions (including borrowing limits based the
Company's operating cash flow), under which no borrowings were
outstanding and $3.0 million was reserved for letters of credit.  The
maximum aggregate principal amount of the credit facility is required to
be reduced by $2.5 million per quarter commencing on July 1, 1997 and by
$2.9 million per quarter commencing on January 1, 1999 until maturity on
July 1, 2000.  The Company has received a commitment letter from a
financial institution to provide a $100 million credit facility to the
Company, which will amend and restate the Company's current credit
facility.  The Company expects to execute definitive credit documents and
close on the new credit facility in the fourth quarter.  The Company
anticipates that the new credit facility will be syndicated among several
financial institutions.  The facility will provide additional working
capital, capital for acquisitions and market expansion, and contains
generally more flexible terms and conditions than the current credit
facility.  If the facility is closed in the fourth quarter of 1996, the
maximum aggregate principal amount of the new facility would be required
to be reduced by $8 million per quarter commencing on December 31, 1998
until September 30, 2000, and by $9 million per quarter commencing on
December 31, 2000 until maturity of the loan in October 2001.

     During the quarter, the Company made a cash tender offer of Cdn.
$21.50 per share (total purchase price of Cdn. $49.4 million or US $36.0
million) for the repurchase of the minority-held shares of ACC
TelEnterprises Ltd.  In October, 1996, the Company paid Cdn. $36.0
million to minority shareholders when 1.8 million of the outstanding
shares were tendered. Approximately .5 million shares are still
outstanding, and the Company plans to acquire these shares during the
fourth quarter of 1996, at a cost of Cdn. $ 10.0 million.

     In addition, the Company has $10.0 million of capital lease
obligations which mature during 1996, 1997 and 1998.  The Company's
financing arrangements, which are secured by substantially all of the
Company's assets and the stock of certain subsidiaries, require the
Company to maintain certain financial ratios and prohibit the payment of
dividends.

     In the normal course of business, the Company uses various financial
instruments, including derivative financial instruments, for purposes
other than trading.  These instruments include letters of credit,
guarantees of debt, interest rate swap agreements and foreign currency
exchange contracts relating to intercompany payables of foreign
subsidiaries.  The Company does not use derivative financial instruments
for speculative purposes.  Foreign currency exchange contracts are used
to mitigate foreign currency exposure and are intended to protect the
U.S. dollar value of certain currency positions and future foreign
currency transactions.  The aggregate fair value, based on published
market exchange rates, of the Company's foreign currency contracts at
September 30, 1996 was $46.4 million.  When applicable, interest rate
swap agreements are used to reduce the Company's exposure to risks
associated with interest rate fluctuations. As is customary for these
types of instruments, collateral is generally not required to support
these financial instruments.

     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.  However, at September 30, 1996, in management's opinion there was
no significant risk of loss in the event of nonperformance of the
counterparties to these financial instruments.  The Company controls its
exposure to counterparty credit risk through monitoring procedures and by
entering into multiple contracts, and management believes that reserves
for losses are adequate.  Based upon the Company's knowledge of the
financial position of the counterparties to its existing derivative
instruments, the Company believes that it does not have any significant
exposure to any individual counterparty or any major concentration of
credit risk related to any such financial instruments.

     The Company believes that, under its present business plan, the net
proceeds from the public offering of Class A Common Stock of the Company,
together with borrowing availability under the existing credit facility,
and cash from operations will be sufficient to meet anticipated working
capital and capital expenditure requirements of its existing operations.
The forward-looking information contained in the previous sentence may be
affected by a number of factors, including the matters described in this
paragraph and in Exhibit 99.1 attached hereto. The Company may need to
raise additional capital from public or private equity or debt sources in
order to finance its operations, capital expenditures and growth for
periods after 1996.  Moreover, the Company believes that continued growth
and expansion through acquisitions, investments and strategic alliances
is important to maintain a competitive position in the market and,
consequently, a principal element of the Company's business strategy is
to develop relationships with strategic partners and to acquire assets or
make investments in businesses that are complementary to its current
operations.  The Company may need to raise additional funds in order to
take advantage of opportunities for acquisitions, investments and
strategic alliances or more rapid international expansion, to develop new
products or to respond to competitive pressures.  If additional funds are
raised through the issuance of equity securities, the percentage
ownership of the Company's then current shareholders may be reduced and
such equity securities 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 acceptable terms
or at all.  In the event that the Company is unable to obtain additional
capital or is unable to obtain additional capital on acceptable terms,
the Company may be required to reduce the scope of its presently
anticipated expansion opportunities and capital expenditures, which could
have a material adverse effect on its business, results of operations and
financial condition and could adversely impact its ability to compete.

     The Company may seek to develop relationships with strategic
partners both domestically and internationally and to acquire assets or
make investments in businesses that are complementary to its current
operations.  Such acquisitions, strategic alliances or investments may
require that the Company obtain additional financing and, in some cases,
the approval of the holders of debt of the Company.  The Company's
ability to effect acquisitions, strategic alliances or investments may be
dependent upon its ability to obtain such financing and, to the extent
applicable, consents from its debt or preferred stock holders.


SFAS NO. 123

     The Company is required to adopt SFAS No. 123, "Accounting for
Stock-Based Compensation" in 1996.  This Statement encourages entities to
adopt a fair value based method of accounting for employee stock option
plans (whereby compensation cost is measured at the grant date based on
the value of the award and is recognized over the employee service
period), rather than the current intrinsic value based method of
accounting (whereby compensation cost is measured at the grant date as
the difference between market value and the price for the employee to
acquire the stock).  If the Company elects to continue using the
intrinsic value method of accounting, pro forma disclosures of net income
and earnings per share, as if the fair value based method of accounting
had been applied, will need to be disclosed.  Management has decided that
the Company will not adopt the fair value based method of accounting for
the Company's stock option plans and will include the required pro forma
disclosures in the annual financial statements.

<PAGE>

                                  -  -




PART II. OTHER INFORMATION




ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

     (c) Exhibits.  See Exhibit Index.

     (b) Reports on Form 8-K.  On September 17, 1996, the Company filed a
Report on Form 8-K to report, under the heading of Item 5, Other Events,
on the cash tender offer for the minority-held shares of ACC
TelEnterprises Ltd., the election of a new Chairman of the Board of
Directors, the proposed network expansion in the U.K and the U.S., the
new proposed credit facility, and the acquisition of assets from Internet
Canada Corp.



SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused the Report to be signed on its behalf by
the Undersigned thereunto duly authorized.

                                        ACC CORP.
                                        (Registrant)


Dated:  November 13, 1996                    /s/ Michael R. Daley
                                        Michael R. Daley
                                        Executive Vice President
                                        and Chief Financial Officer


Dated:  November 13, 1996                    /s/ Sharon L. Barnes
                                        Sharon L. Barnes
                                        Controller
<PAGE>

                   EXHIBIT INDEX

EXHIBIT NUMBER      DESCRIPTION                   LOCATION

11.1           Statement re Computation of   See note 3 to the notes to
               Per Share Earnings            Consolidated Financial
                                             Statements filed herewith

27.1           Financial Data Schedule       Filed herewith

99.1           Company Risk Factors          Filed herewith


