
<PAGE>
 
                                 Exhibit 99.18

                          MORTGAGE OF LEASEHOLD INTEREST
                          ------------------------------



          This agreement made as of the 21st day of July, 1995.
                                        ----        ----       

BETWEEN:

               ACC LONG DISTANCE INC./INTERURBAINS ACC INC., a corporation
               incorporated under the laws of the province of Ontario

               (hereinafter called the "Company")

                                                   OF THE FIRST PART

               - and -

               ACC CORP., a corporation incorporated under the laws of the State
               of Delaware

               (hereinafter called the "Mortgagee")

                                                   OF THE SECOND PART



          WHEREAS ACC Long Distance Ltd./Interurbains ACC Ltee. ("ACC Ltd."), as
lessee, entered into an amended and restated lease dated as of March 1, 1994
between the Company, as tenant, and Coopers & Lybrand as receiver and manager
for Dundas Kipling II Inc., as landlord (such lease as the same may be amended,
extended or replaced from time to time being collectively called the "Lease"),
relating to the lands and premises municipally known as 5343 Dundas Street West,
Etobicoke, Ontario and more particularly described in Schedule "A" hereto (which
leased premises are hereinafter referred to as the "Lands");

          AND WHEREAS the ACC ltd. assigned its right, title and interest in and
to the Lease and the obligations owing thereunder to the Company pursuant to an
assignment and assumption agreement dated as of March 1, 1994;

          AND WHEREAS the Company has agreed to mortgage, charge and assign all
of its right, title and interest in and to all benefits arising under or in
respect of the Lease including without limitation its rights and interests in
the Lands (which rights, title, interests and benefits are hereinafter
collectively called the "Leasehold Interest") to the Mortgagee as security for
payment of the Indebtedness;
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                                     - 2 -


          NOW WITNESS that in consideration of the sum of TWO DOLLARS ($2.00)
now paid by the Mortgagee to the Company and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
the Company), the Company hereby agrees with the Mortgagee as follows:

          1.   Subject to the exception as to leasehold hereinafter contained,
the Company, as security for repayment of the sum of Forty-Five Million
($45,000,000 Cdn.) Canadian Dollars and all present and future indebtedness,
liabilities and other obligations of the Company under or pursuant to a certain
credit agreement dated July 21, 1995 between the Mortgagee, as lender, and the
Company, ACC Telenterprises Ltd./Telentreprises ACC Ltee. and ACC Long Distance
Inc./Interurbains ACC Inc., as borrowers (such credit agreement as may be
amended, supplemented, replaced or restated from time to time being herein
called the "Credit Agreement") and under and pursuant to a related grid
promissory note dated July 21, 1995 signed by the Company, ACC Telenterprises
Ltd./Telentreprises ACC Ltee. and ACC Long Distance Inc./Interurbains ACC Inc.
in favour of the Mortgagee in the principal amount of $29,000,000 U.S. (all of
the Company's foregoing indebtedness, liabilities and obligations to the
Mortgagee under the Credit Agreement and the aforesaid promissory note being
hereinafter called the "Credit Agreement Indebtedness") together with interest
thereon at the rate of twenty-five (25%) percent per annum calculated and
payable monthly not in advance, both before and after demand and before and
after default, judgment and execution from the date hereof until payment (all of
the foregoing hereinafter collectively referred to as the "Indebtedness"),
hereby mortgages, charges and assigns to the Mortgagee, and grants to the
Mortgagee a security interest in the Leasehold Interest.

          TO HAVE AND TO HOLD the assets hereby mortgaged and charged to the
Mortgagee its successors and assigns, forever but subject to the terms and
conditions herein set forth.

          2.   It is hereby declared that the last day of any term of years
reserved by any lease, verbal or written, or any agreement therefor (including
without limitation the Lease), now held or hereafter acquired by the Company,
and whether falling within the general or particular description of the
mortgaged premises hereunder or otherwise shall be excepted out of the mortgage
and charge constituted hereby or by any other agreement, but the Company shall
stand possessed of the reversion of one day remaining in the Company in respect
of any such term of years, for the time being demised, as aforesaid, upon trust
to assign and dispose of the same as any purchaser of such term of years shall
direct.

          3.   The Company hereby covenants and agrees that it shall at all
times, at its own cost and expense, do, execute, acknowledge and deliver or
cause to be done, executed, acknowledged or delivered all and singular every
such further act, deed, transfer, assignment and assurance as the Mortgagee may
reasonably require for the better mortgaging, charging, transferring, assigning
and confirming unto the Mortgagee the property and assets hereby mortgaged and
charged or intended so to be or which the Company may hereafter become bound
<PAGE>
 
                                     - 3 -

to mortgage charge, transfer or assign in favour of the Mortgagee and for the
better accomplishing and effectuating of this mortgage.

          4.   The Mortgagee shall not in any way whatsoever be obligated to
perform any covenants or obligations of the Company under the Lease.

          5.   The Company represents and warrants to the Mortgagee that as of
the date hereof:  (a) the Lease has not been surrendered or forfeited; (b) the
rents and covenants therein contained have been duly paid and performed by the
Company; (c) the Company has full right, power and authority to mortgage and
charge the Lease and the Leasehold Interest as contemplated hereby; and (d) the
Company has obtained the consent of the Landlord to the mortgaging and charging
of the Lease and the Leasehold Interest (if such consent is required to be
obtained from the Landlord).

          6.   The Company hereby covenants and agrees to and with the Mortgagee
that until the Indebtedness has been repaid in full, the Company:

               (a)  shall not without the prior written consent of the Mortgagee
                    create any lien upon or assign or transfer as security or
                    pledge or hypothecate any asset subject to the mortgage and
                    charge hereof except to the Mortgagee and the Company will
                    not, in the ordinary course of business or otherwise, sell,
                    transfer, assign, or otherwise dispose of any such asst
                    without the prior written consent of the Mortgagee;

               (b)  shall not without the prior written consent of the Mortgagee
                    merge or amalgamate with any other corporation;

               (c)  shall insure and keep insured the buildings, erections,
                    fixtures, improvements, premises and all other assets hereby
                    charged against loss or damage by fire and other insurable
                    hazards which such assets are commonly insured against in
                    the Province of Ontario to the full insurable value thereof;
                    the Company shall duly and promptly pay all premiums and
                    other sums of money payable for maintaining such insurance
                    and shall cause all insurance proceeds thereunder to be
                    payable in the case of loss to the Mortgagee as first
                    mortgagee and loss payee such insurance policy(ies) to
                    contain a standard mortgage clause and the Company shall,
                    upon request from the Mortgagee, provide to the Mortgagee
                    evidence of the payment of such premiums and the assignment
                    of such insurance proceeds to the Mortgagee; and

               (f)  shall strictly comply with every covenant and undertaking
                    heretofore or hereafter given by it to the Mortgagee.
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                                     - 4 -

          7.  The Company covenants and agrees to and with the Mortgagee that:

               (a)  it shall at all times fully perform and comply with all of
                    its covenants and obligations contained in the Lease, and
                    imposed upon or assumed or agreed to by it pursuant to any
                    prior encumbrance of the Lands or any part thereof or its
                    Leasehold Interest therein and that, if the Company shall
                    fail to do so the Mortgagee may (but shall not be obligated
                    to) take any action the Mortgagee deems necessary or
                    desirable to cure any default by the Company in the
                    performance of or compliance with any of the obligations of
                    the Company pursuant to the Lease or imposed upon, assumed
                    by or agreed to by the Company pursuant to any such prior
                    encumbrance; upon receipt by the Mortgagee from the Landlord
                    or from any such prior encumbrancer of any written notice of
                    default by the Company, the Mortgagee may rely thereon and
                    take any action as aforesaid to cure such default even
                    though the existence of such default or the nature thereof
                    may be questioned or denied by the Company or by any party
                    on behalf of the Company; the Company hereby expressly
                    grants to the Mortgagee and agrees that the Mortgagee shall
                    have the absolute and immediate right to enter in and upon
                    the Lands or any part thereof to such extent and as often as
                    the Mortgagee, in its sole discretion, deems necessary or
                    desirable, in order to cure any such default by the Company;
                    the Mortgagee may pay and expend such sums of money as the
                    Mortgagee in its sole discretion, acting reasonably, deems
                    necessary or desirable for any such purpose, and the Company
                    hereby agrees to pay to the Mortgagee, immediately upon
                    notification by the Mortgagee and without demand, all such
                    sums so paid and expended by the Mortgagee, together with
                    interest thereon at the rate applicable to the Indebtedness
                    from time to time; all such sums so paid or expended by the
                    Mortgagee and such interest thereon, shall be secured hereby
                    in addition to the Indebtedness and in priority to all other
                    mortgages and charges;

               (b)  it shall not surrender the Lease or any rights of renewal
                    with respect thereto nor terminate nor cancel the Lease
                    without the prior written consent of the Mortgagee and that
                    the Company will not, without the prior written consent of
                    the Mortgagee, modify, revise, alter or amend the Lease,
                    either orally or in writing;

               (c)  no release or forbearance of any of the Company's covenants
                    and obligations contained in the Lease or pursuant to any
                    prior encumbrance of the Leasehold Interest or any part
                    thereof shall release the Company from any of its
                    obligations contained herein;
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                                     - 5 -

               (d)  unless the Mortgagee shall otherwise expressly consent in 
                    writing, the title in fee simple to the Lands and the 
                    Leasehold Interest shall not merge but shall always remain
                    separate and distinct, notwithstanding the union of said
                    estates in either the Landlord or the Company, by purchase
                    or otherwise;

               (e)  if the Company shall, at any time prior to the repayment in
                    full of the Indebtedness, purchase or in any way acquire the
                    freehold title to the Lands, this mortgage and charge shall
                    attach, extend to and constitute a mortgage and charge of
                    such freehold estate;

               (f)  it will indemnify and save harmless the Mortgagee from and
                    against any and all losses, costs, claims, actions, damages
                    and expenses (including without limitation legal fees and
                    disbursements on a solicitor and client basis) incurred or
                    suffered by the Mortgagee or its agents or employees as a
                    result of or in connection with the presence, removal,
                    disposal or movement of any hazardous waste or substance on
                    the Lands which is not in compliance with Applicable Law;

               (g)  it will at any time and from time to time, upon request from
                    the Mortgagee, deliver to the Mortgagee a statement in
                    writing certifying that:  the Lease is in full force and
                    effect; there are no defaults under the Lease; the Lease has
                    not been modified or amended; all amounts required to be
                    paid by the Company under the Lease have been paid to the
                    date of the certificate;

               (h)  upon the occurrence of a default hereunder, the Mortgagee
                    may peaceably and quietly enter upon and use, occupy,
                    possess and enjoy the Lands and the Leasehold Interest, free
                    from all encumbrances, liens and charges, without hindrance,
                    interruption or denial of the same by the Company or any
                    other person or persons, save only the rights of the
                    Landlord under the Lease;

               (i)  the Company hereby assigns and transfers to the Mortgagee
                    all of the Company's right, title and interest in and to the
                    benefit of any and all non-disturbance, attornment or like
                    agreements to which the Company is now or may hereafter
                    become a party (and the Company covenants and agrees to and
                    with the Mortgagee that the Company shall use its best
                    efforts at its own cost and expense to obtain from all
                    appropriate third parties non-disturbance, attornment or
                    other similar agreements in favour of the Mortgagee in form
                    and substance satisfactory to the Mortgagee); and
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                                     - 6 -

               (j)  the Company shall not subordinate or postpone or agree to
                    subordinate or postpone the Leasehold Interest or the
                    Mortgagee's security interests, charges or rights therein,
                    to or in favour of any lien, charge or encumbrance without
                    the prior written consent of the Mortgagee.

          8.   The Indebtedness shall become payable and the security hereby
constituted shall become enforceable in each and every of the events following
(each of such events being hereinafter referred to as an "Event of Default"):

               (a)  if an Event of Default (as defined in the Credit Agreement)
                    occurs;

               (b)  if the Company defaults in the observance or performance in
                    any material respect of any of its covenants, agreements or
                    other obligations under this mortgage, provided however that
                    if such default is curable, such default has not been
                    remedied within 30 days after the Secured Party has given
                    notice to the Company to remedy the default;

               (c)  if an order is made or a resolution passed for the winding-
                    up of the Company, or if a petition is filed for the
                    winding-up of the Company;

               (d)  if the Company ceases or threatens to cease to carry on
                    business or if the Company commits or threatens to commit
                    any act of bankruptcy or if the Company becomes insolvent or
                    makes an assignment or proposal in bankruptcy or makes a
                    bulk sale of its assets or if a bankruptcy petition is filed
                    or presented against the Company;

               (e)  if any proceedings with respect to the Company are commenced
                    under the Companies' Creditors Arrangement Act or the
                    Bankruptcy and Insolvency Act or if the Company shall seek
                    relief or consent to the filing of a petition against it
                    under any law which involves any compromise of any
                    creditor's rights against the Company;

               (f)  if an execution or any other process of any court becomes
                    enforceable against the Company or if a distress or
                    analogous process is levied upon the property of the Company
                    or any part thereof; or

               (g)  if any licences, permits or approvals required by any law,
                    regulation or governmental policy or any governmental agency
                    or
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                                     - 7 -

                    commission for the operation by the Company of its business
                    shall be withdrawn or cancelled.

          9.   No waiver by the Mortgagee of any of its rights or remedies
hereunder shall be considered a waiver of any other or subsequent right or
remedy of the Mortgagee, no delay or omission in the exercise or enforcement by
the Mortgagee of any right or remedy shall be considered as a waiver of such
right or remedy of the Mortgagee and no exercise or enforcement of such right or
remedy shall exhaust or preclude the exercise of any other right or remedy by
the Mortgagee.

          10.  Upon the occurrence and during the continuance of an Event of
Default the Mortgagee may:  (a) take possession of all or part of the Lands and
the Leasehold Interest with the power to exclude the Company, its agents and
servants therefrom; and (b) enter upon and lease or sell the whole or any part
or parts of the property and assets charged hereby and any such sale may be made
hereunder by public auction, by public tender or by private contract, with or
without notice and with or without advertising and without any other formality,
all of which are hereby waived by the Company to the fullest extent permitted by
law and such sale shall be on such terms and conditions as to credit or
otherwise and as to upset or reserve bid or price as to the Mortgagee in its
sole discretion may seem advantageous and such sale may take place whether or
not the Mortgagee has taken possession of such property and assets.

          11.  Upon the occurrence of an Event of Default, the Mortgagee may
appoint by instrument in writing a receiver (including a receiver and manager)
or receivers of the Leasehold Interest or any part hereof (which receiver or
receivers may be any person or persons, whether an officer or officers or
employee or employees of the Mortgagee or not and the Mortgagee may remove any
receiver or receivers so appointed and appoint another or others in his or their
stead) and any receiver or receivers so appointed shall have the power to:

               (a)  take possession of and to use the Leasehold Interest or any
                    part thereof;

               (b)  preserve and maintain the Leasehold Interest as the receiver
                    shall deem advisable;

               (c)  borrow money required for the preservation or protection of
                    the Leasehold Interest or any part thereof;

               (d)  further charge the Leasehold Interest in priority to the
                    security interests of this mortgage as security for monies
                    so borrowed; and

               (e)  sell, lease or otherwise dispose of the whole or any part of
                    the Leasehold Interest on such terms and conditions and in
                    such manner as the receiver shall determine in its sole and
                    unfettered discretion.
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                                     - 8 -

          The Mortgagee shall not be responsible for any actions or errors of
omission by the receiver or receivers in exercising any such powers.

          12.  All rights and remedies of the Mortgagee contained herein shall
be cumulative, and all such rights and remedies may be pursued jointly and
separately, successively or concurrently at the sole discretion of the
Mortgagee.

          13.  The Company agrees to pay to the Mortgagee forthwith on demand
all costs, charges, expenses and fees (including without limitation all legal
fees and disbursements on a solicitor and client basis) of or incurred by the
Mortgagee and by any receiver or receivers or agent or agents appointed by the
Mortgagee in connection with the enforcement of this mortgage, whether by
realization, taking possession of the Tenant's Leasehold Interest or otherwise.
All such sums, together with interest thereon at the rate or rates applicable to
the Indebtedness shall be secured by the charges contained herein.  The term
"receiver" as used in this mortgage includes a receiver and manager.

          14.  Upon payment by the Company, its successors or assigns, of the
Indebtedness hereby secured (including without limitation interest, costs and
expenses), the Mortgagee shall upon request in writing by the Company, its
successors or assigns, deliver up this mortgage to the Company, its successors
or assigns and, at the expense of the Company, cancel and discharge the charge
of this mortgage and execute and deliver to the Company, its successors or
assigns such deeds or other instruments as shall be requisite to discharge the
charge constituted hereby.

          15.  This security is in addition to and not in substitution for any
other security now or hereafter held by the Mortgagee.

          16.  In the event that any provision hereof is for any reason held by
a court of competent jurisdiction to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof and this mortgage shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

          17.  This mortgage shall be governed by the laws of the Province of
Ontario and the federal laws of Canada applicable therein and all disputes among
the parties hereto shall be submitted to the courts of the Province of Ontario
provided that the Mortgagee shall be entitled to commence actions in the courts
of any other jurisdiction at its discretion for the purpose of enforcing the
provisions hereof.

          18.  All notices, demands, requests, consents and other communications
required or permitted or otherwise to be given for any purpose hereunder shall
be in writing and shall be communicated by personal delivery or by facsimile
transmission to the respective addresses herein set forth, or such other
addresses which the parties hereto may from time to time designate by written
notice to the other as required herein.  All notices, demands, requests,
consents and other communications shall be addressed as follows:
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                                     - 9 -

               (a)  If to the Company, to it at:

               5343 Dundas Street West
               Suite 600
               Etobicoke, Ontario
               M9B 6K5

               Attention:  Barry Singer
               Facsimile No.: (416) 236-7392

               (b)  If to the Mortgagee, to it at:

               400 West Avenue
               Rochester, New York 14611

               Attention:  Michael Daley
               Facsimile No.: (716) 987-3335

Each communication given by personal delivery or by facsimile transmission shall
be deemed to have been received by the party to which it is so addressed on the
date of such personal delivery or facsimile transmission, provided that it is
delivered or faxed before 5:00 p.m. (Toronto, Ontario time) on a Business Day
(failing which, receipt shall be deemed to have occurred on the next following
Business Day).  For the purposes of this mortgage, a "Business Day" means a day
on which Bank of Montreal's main Toronto, Ontario branch (at 1 First Canadian
Place) is open for normal banking business, but specifically excludes any
Saturday, Sunday or any other day which is a statutory holiday in Toronto,
Ontario.

          19.  This mortgage shall enure to the benefit of the Mortgagee and its
successors and assigns and it shall be binding upon the Company and its
successors and assigns.  The Mortgagee shall be entitled in its sold and
unfettered discretion, without the consent of the Company, to assign the
indebtedness hereunder (and any and all security therefor or interest therein)
to any assignee or assignees and the Company shall, at the Mortgagee's request,
execute or cause to be executed all documents required by the Mortgagee to
facilitate such assignment.  The Borrower shall not, without the Mortgagee's
prior written consent, assign any interest herein to any other person, firm,
corporation or other entity whatsoever.

          20.  Notwithstanding anything else herein contained, payment by
Company to the Mortgagee of the Credit Agreement Indebtedness and other costs
and expenses (and interest thereon) contemplated hereby shall constitute
satisfaction and payment of the Indebtedness owing by the Company to the
Mortgagee hereunder.

          21.  In the event of any of any conflict or inconsistency between the
terms and conditions contained herein and the terms and conditions contained in
Standard Charge Terms 911, the terms and conditions contained herein shall
govern to the extent of such conflict
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                                     - 10 -

or inconsistency and the provisions of the Standard Charge Terms No. 911 shall
be deemed to be varied accordingly.

          22.  Unless otherwise stated herein, all dollar amounts referred to
herein are denominated in Canadian dollars.

          IN WITNESS WHEREOF the Company has caused its corporate seal to be
affixed to this mortgage under the hands of by its proper officers duly
authorized in that behalf as of the 21st day of July, 1995.

                                    ACC LONG DISTANCE INC/ INTERURBAINS ACC INC.


                                    Per: /s/ John J. Zimmer
                                        ----------------------
                                    Name:  John J. Zimmer
                                    Title:  Assistant Controller


                                    Per: /s/ Daniel J. Venuti
                                        ----------------------
                                    Name:  Daniel J. Venuti
                                    Title:  Authorized Signatory
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                                     - 11 -

                                  SCHEDULE "A"

                           Legal Description of Lands
                           --------------------------


Part of Lot 7, Concession 5, Colonel Smith's Tract, City of Etobicoke, in the
Municipality of Metropolitan Toronto, designated as Part 3 and 5 on Plan 64R-
5004.

City of Toronto, Municipality of Metropolitan Toronto.
