
                            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, 1997.

( )  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             (IRS 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, 1997, the Registrant had issued and
outstanding 16,984,657 shares of its Class A Common Stock, par
value $.015 per share.

The Index of Exhibits filed with this Report is found at Page 29.
PART I.   FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS
<TABLE>
ACC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except share and per share data)
<CAPTION>
                                              Three months ended               Nine months ended
                                                September 30,                    September 30,
                                           1997            1996            1997             1996

Revenue:
   <S>                                   <C>             <C>             <C>              <C>
   Toll revenue                          $83,919         $70,226         $238,596         $206,362
    Local service and other               11,205           7,059           28,681           17,865
                                          95,124          77,285          267,277          224,227

Network costs                             54,837          48,815          156,973          143,803

Gross profit                              40,287          28,470          110,304           80,424

Other operating expenses:
  Depreciation and amortization             5,922          4,266           16,401           12,061
  Selling, general and administrative      27,791         20,995           76,091           58,977
                                           33,713         25,261           92,492           71,038

 Income from operations                     6,574          3,209           17,812            9,386

Other income (expense):
  Net Interest                               (601)          (186)          (1,941)          (2,622)
  Foreign exchange gain (loss)                 20             22             (168)             (48)
                                             (581)          (164)          (2,109)          (2,574)

 Income before provision for income
   taxes and minority interest              5,993          3,045           15,703            6,812

 Provision for  income taxes                1,085            543            2,379            1,396

 Income before minority interest            4,908          2,502           13,324            5,416

Minority interest in (earnings) of
  consolidated subsidiary                                   (303)                             (899)

 Net income                                 4,908          2,199           13,324            4,517
 Less Series A preferred stock dividend                     (334)                           (1,022)
 Less Series A preferred stock accretion                    (872)                           (1,496)

Income applicable to common stock          $4,908           $993          $13,324           $1,999

Earnings per common and common
     equivalent share                       $0.28          $0.06            $0.76            $0.13
Average number of common and common and
  common equivalent shares             17,736,192     16,694,546       17,494,614       14,984,299

</TABLE>
ACC CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
UNAUDITED

                                             September 30,         December 31,
                                                 1997                  1996


CURRENT ASSETS:
 Cash and cash equivalents                           $0                 $2,035
 Accounts receivable, net of allowance
 for doubtful accounts of $3,533 in
  1997 and $3,795 in 1996                        69,539                 51,474
 Other receivables                                2,015                  3,792
 Prepaid expenses and other assets                7,908                  4,632
  TOTAL CURRENT ASSETS                           79,462                 61,933


PROPERTY, PLANT, AND EQUIPMENT
 At cost                                        153,758                119,398
 Less-accumulated depreciation and
  amortization                                  (49,308)               (38,946)
  TOTAL PROPERTY, PLANT, AND EQUIPMENT          104,450                 80,452


OTHER ASSETS:
 Goodwill and customer base, net                 75,874                 50,629
 Deferred installation costs, net                 5,277                  4,312
 Other                                           11,534                  6,705
  TOTAL OTHER ASSETS                             92,685                 61,646


   TOTAL ASSETS                                $276,597               $204,031

                                             September 30,         December 31,
                                                1997                   1996
CURRENT LIABILITIES:
 Notes payable                                     $877                   $730
 Current maturities of
  long-term debt                                  2,647                  3,521
 Accounts payable                                 8,341                 15,351
 Accrued network costs                           32,042                 22,908
 Other accrued expenses                          18,534                 34,884
   TOTAL CURRENT LIABILITIES                     62,441                 77,394

Deferred income taxes                             3,398                  2,767

Long-term debt                                   74,388                  6,007


SHAREHOLDERS' EQUITY:
 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 - 16,984,657 in 1997 and
  17,684,361  in 1996                                271                   265
 Class B Common Stock, $.015 par value,
  Authorized - 25,000,000 shares;
  Issued - no shares                                  -                     -
 Capital in excess of par value                  122,097               116,878
 Cumulative translation adjustment                (1,402)               (1,362)
 Retained earnings                                17,014                 3,692
                                                 137,980               119,473
 Less-
 Treasury stock, at cost (1,089,884
  shares in 1997 and 1996)                        (1,610)               (1,610)
    TOTAL SHAREHOLDERS' EQUITY                   136,370               117,863

    TOTAL LIABILITIES AND
    SHAREHOLDERS' EQUITY                        $276,597              $204,031

<TABLE>
ACC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Amounts in 000's)
<CAPTION>
                                                                 For the nine months ended
                                                                      September 30,
                                                                    1997          1996
CASH FLOWS FROM OPERATING ACTIVITIES
 <S>                                                              <C>            <C>
 Net income                                                       $13,324        $4,517

 Adjustments to reconcile net income  to net cash provided by
   operating activities:
   Depreciation and amortization                                   16,401        12,061
   Deferred income taxes                                            2,167           362
   Minority interest in earnings  of consolidated subsidiary                        899
   Unrealized foreign exchange loss                                    17          (137)
   Amortization of deferred financing costs                           457           316
   (INCREASE) DECREASE IN ASSETS:
      Accounts receivable, net                                    (14,622)      (14,225)
      Other receivables                                               684         1,653
      Prepaid expenses and other assets                            (3,084)       (1,228)
      Deferred installation costs                                  (2,785)       (1,943)
      Other                                                        (4,613)         (390)
   INCREASE (DECREASE) IN LIABILITIES:
      Accounts payable                                            (10,434)         (371)
      Accrued network costs                                         6,225        (2,326)
      Other accrued expenses                                      (17,979)         (780)

        Net cash provided by (used in) operating activities       (14,242)       (1,592)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures, net                                       (34,469)      (14,865)
  Payment for purchase of subsidiaries, net of cash acquired      (22,245)            0
  Acquisition of customer base                                     (1,305)       (2,226)
       Net cash used in investing activities                      (58,019)      (17,091)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under lines of credit and notes payable              148,507        19,500
  Repayments under lines of credit and notes payable              (76,230)      (42,999)
  Repayment of long-term debt, other than lines of credit          (8,096)       (2,841)
  Proceeds from issuance of common stock                            5,225        68,476
  Financing costs                                                  (1,294)         (441)

        Net cash provided by financing activities                  68,112        41,695

Effect of exchange rate changes on cash                             2,114          (408)

Net increase (decrease) in cash from operations                    (2,035)       22,604

Cash and cash equivalents at beginning of period                    2,035           518

Cash and cash equivalents at end of period                             $0       $23,122

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                                                         $1,630        $2,326
  Income taxes                                                     $2,646        $1,033

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Fair Value of acquired companies assets acquired other than
cash                                                         $     34,985             0
Fair value of acquired companies liabilities assumed               12,740             0
   Net cash paid                                             $     22,245 $

Equipment purchased through capital leases                   $      1,490 $       2,775

</TABLE>

ACC CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

September 30, 1997

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. 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 its U.S.
operating subsidiaries("ACC U.S."), ACC TelEnterprises Ltd.("ACC Canada"),
ACC Long Distance UK Ltd. ("ACC U.K."), and ACC Telecommunications GmbH
("ACC Germany").  In this Form 10-Q, references to "dollar" and "$" are to
United States dollars, references to "Cdn. $" are to Canadian dollars,
references to "pound symbol" are to English pounds sterling, references to
"DM" are to German Deutchmarks, 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. "North American Operations" includes operations in the
United States and Canada, while "Europe Operations" includes operations in
the United Kingdom and German operations.

2.        Form 10-K

     Reference is made to the following footnotes included in the Company's
1996 Annual Report on Form 10-K:

          Principles of Consolidation
          Minority Interest
          Revenue
          Other Receivables
          Property, Plant and Equipment
          Deferred Costs
          Goodwill and Customer Base
          Common and Common Equivalent Shares
          Foreign Currency Translation
          Income Taxes
          Cash Equivalents
          Derivative Financial Instruments
          Financial Instruments
          Stock-Based Compensation
          Use of Estimates
          Reclassifications
          Description of Business
          Equal Access Costs
          Debt
          Senior Credit Facility and Lines of Credit
          Working Capital Lines of Credit
          Income Taxes
          Redeemable Preferred Stock
          Public Offerings
          Private Placement
          Stock-Based Compensation
          Employee Long-Term Incentive Plan
          Employee Stock Purchase Plan
          Non-Employee Directors' Stock Option Plan
          United Kingdom Sharesave Scheme
          Treasury Stock
          Operating Leases
          Employment and Other Agreements
          Purchase Commitments
          Defined Contribution Plans
          Annual Incentive Plan
          Legal Matters
          Geographic Area Information
          Related Party Transactions

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 (1996 data
retroactively restated for a three-for-two stock split as of August 8,
1996) is computed as follows:

                               For the Three Months       For the Nine Months
                               Ended September  30,       Ended September 30,
Average Number Outstanding:      1997        1996         1997          1996

Common Shares                16,858,307   15,315,633   16,747,143   13,767,380
Common Equivalent Shares        877,885    1,378,913      747,471    1,216,919

TOTAL                        17,736,192   16,694,546   17,494,614   14,984,299


     Fully diluted income per share amounts are not presented for the prior
period because inclusion of these amounts would be anti-dilutive.  Fully
diluted income per share amounts for the current period do not differ
materially from primary earnings per share amounts.
4.             Recently Issued Accounting Standards

SFAS No. 128
     In March 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard No. 128, "Earnings per
Share," which is applicable to the Company beginning in the fourth quarter
of 1997. This statement, upon adoption, will require all prior-period
earnings per share ("EPS") data to be restated, to conform to the
provisions of the statement. The statement will eliminate the disclosure of
primary earnings per share which includes the dilutive effect of stock
options, warrants and other convertible securities ("Common Stock
Equivalents") and instead requires reporting of "basic" earnings per share,
which will exclude Common Stock Equivalents.  Additionally, the statement
changes the methodology for fully diluted earnings per share.  In the
opinion of the Company's management, the adoption of this new accounting
standard will not have a material effect on the reported earnings per share
of the Company.

     While the Statement prohibits early adoption, pro forma presentation
of the impact of the Statement for the reporting periods is illustrated
below:
<TABLE>
          Pro Forma Earnings Per Share Computation under FAS 128
          
                    Three Months ended                     Nine Months ended
                 September 30, 1997 and 1996            September 30, 1997 and 1996
            (amounts in thousands except             (amounts in thousands except
          share and per share amounts)                share and per share amounts)
     

                            1997                       1996                       1997                1996
                   Income  Shares  Per Share  Income  Shares  Per Share   Income  Shares  Per Share  Income  Shares  Per Share

Basic EPS
<S>                <C>    <C>         <C>     <C>     <C>         <C>     <C>      <C>         <C>    <C>
Net income         $4,908                     $2,199                      $13,324                     $4,517
Less:  preferred
stock dividends
and preferred
stock accretion       -                       (1,206)                                                 (2,518)
Income available to
common shareholder $4,908 16,858,307   $.29 $    993  15,315,633  $.06    $13,324 16,747,143   $.80   $1,999  13,767,380  $.14

Diluted EPS
Add:  Options and
       warrants              877,885   (.01)      -    1,378,913   -          -      747,471   (.04)     -     1,216,919  (.01)
Income available to
common shareholders$4,908 17,736,192   $.28    $  993 16,694,546  $.06    $13,324 17,494,614   $.76   $1,999  14,984,299  $.13
</TABLE>

     Pro forma basic earnings per common share were computed by
dividing net income by weighted average number of shares of
common stock outstanding during the quarter.  The pro forma
dilutive effect of options and warrants reflects application of
the treasury stock method, utilizing average market prices during
the period, and excludes any assumed exercise that would have
been antidilutive.  Assumed conversion of outstanding redeemable
and convertible preferred stock at September 30, 1996 was
excluded from the above, as the effect would have been
antidilutive.

SFAS No. 130

     In June 1997, the FASB issued Statement of Financial
Accounting Standard No. 130, "Reporting Comprehensive Income",
which is applicable to the Company effective January 1, 1998.
This Statement establishes standards for reporting and display of
comprehensive income and its components (revenue, expenses, gains
and losses)in a full set of general purpose financial statements.
Comprehensive income is defined as the change in the equity of a
business enterprise during a period from transactions and other
events and circumstances from nonowner sources.  It includes all
changes in equity during a period (from net income and other
sources) except those resulting from investments by owners and
distributions to owners.  Management believes that the adoption
of this statement will not have a material effect on the
Company's consolidated results of operations or financial
position.

SFAS No. 131

     In June 1997, the FASB issued Statement of Financial
Accounting Standard No. 131, "Disclosures about Segments of an
Enterprise and Related Information", which is applicable to the
Company effective January 1, 1998.  This Statement requires that
a public business enterprise report financial and descriptive
information about its reportable operating segments.  Operating
segments are components of an enterprise about which separate
financial information is available that is evaluated regularly by
the chief operating decision maker in deciding how to allocate
resources and in assessing performance.  The Statement requires
disclosure of a measure of segment profit or loss, certain
specific revenue and expense items, and segment assets.  It
requires reconciliations of total segment revenues, total segment
profit or loss, total segment assets, and other amounts disclosed
for segments to corresponding amounts in the enterprise's general
purpose financial statements.  It requires that all public
business enterprises report information about the revenues
derived from the enterprise's products or services, about the
countries in which the enterprise earns revenues and holds
assets, and about major customers regardless of whether that
information is used in making operating decisions.  Management
believes that the adoption of this statement will not have a
material effect on the Company's consolidated results of
operations or financial position.

5.        Senior Credit Facility

     Under the terms of the five-year senior revolving credit
facility agreement of July 21, 1995, the Company was obligated to
pay the financial institution an aggregate contingent interest
payment based on the minimum of $750,000 or the appreciation in
value of 140,000 shares of the Company's Class A Common Stock
over the 18 month period ending January 21, 1997, but not to
exceed $2.1 million.  A payment of $2.1 million was made on
January 15, 1997 in conjunction with the amendment to the credit
facility, and was reflected as an accrued expense on the balance
sheet at December 31, 1996.

     On January 14, 1997, the Company signed an agreement with
the same financial institution to provide a $100 million credit
facility to the Company which amended and restated the previous
$35 million credit facility. The amended credit facility was
syndicated among five financial institutions.  Borrowings can be
made in U.S. dollars, Canadian dollars and British pounds, and
are limited individually to $30 million for ACC Canada, $20
million for ACC U.K. and $15 million for the Company's local
exchange business in the U.S., with total borrowings for the
Company limited to $100 million.  The amended facility will be
used to finance capital expenditures, provide working capital and
to provide capital for acquisitions. The maximum aggregate
principal amount of the amended facility is required to be
reduced by $8 million per quarter commencing on March 31, 1999
until December 31, 2000, and by $9 million per quarter commencing
on March 31, 2001 until maturity of the loan in January 2002.

6.        Business Combinations
     
     During the third quarter of 1997, the Company consummated
several business combinations, all accounted for as purchases, as
follows:
     
    ACC U.K. acquired United Telecom Ltd. ("UT"), a pre-paid
  calling card and long distance services provider based in London
  U.K.  The results of operations of UT are reflected in the third
  quarter results of operations effective July 1, 1997.  UT reported
  annual revenues of (pound symbol) 2.8 million (US $4.5 million) for the fiscal
  year ended April 30, 1997.

    ACC U.S. acquired VISTA International Communications Inc.
  ("VISTA"), a privately held, switch-based long distance provider
  headquartered in Mount Arlington, New Jersey. VISTA provides
  services to small-to-medium-sized commercial customers in the
  Northeastern U.S., with concentrations primarily in New Jersey
  and Pennsylvania.  VISTA reported revenues of over $10 million in
  1996.  The results of operations of VISTA are included in the
  accompanying results of operations effective August 1, 1997.

    ACC Germany acquired all the interests of Telenational
  Communications Deutschland Limited Partnership ("TNC") a
  privately held telecommunications services provider headquartered
  in Hamburg, Germany.  TNC is a supplier of prepaid calling cards,
  and has developed affinity programs with large commercial
  customers.  TNC's 1997 annualized revenue is DM 9.2 million (U.S.
  $5.0 million).  The results of operations of TNC are included in
  the accompanying results of operations effective July 1, 1997.

     The aggregate amount paid for these three acquisitions was
U.S. $21.0 million.  The estimated fair value of assets acquired
(including Goodwill and customer base) was U.S. $31.8 million,
and liabilities assumed was U.S. $10.8 million.  Goodwill
associated with these acquisitions was U.S. $28.6 million, and is
being amortized from 20 to 40 years.  Customer base intangibles
associated with these  acquisitions was U.S. $1.1 million, and is
being amortized over 5 years.  (Note:  U.S. dollar equivalent
amounts noted above are estimated based on the relevant month-end
exchange rate).
     
     In October 1997, the Company signed a definitive merger
agreement with US WATS Inc. ("US WATS") a switch-based long
distance provider headquartered in Bala Cynwyd, Pennsylvania.
Under the terms of the agreement, US WATS shareholders will
receive .077 shares of ACC Common Stock for each share of US WATS
Common Stock, subject to certain adjustments.  The exchange ratio
may change in the event of a change in the per share price of ACC
common stock prior to closing and certain other contingencies.
The transaction was valued at $46 million (before assumption of
liabilities) at the date of signing the agreement, but may reach
a maximum of $50.6 million based on the final exchange ratio at
closing and certain other contingencies.  The transaction is
intended to be accounted for as a pooling, and is subject to
final regulatory and US WATS shareholder approvals and certain other
contingencies. US WATS provides switch-based long distance and 
other services to small-medium sized business, switchless resellers 
and other carriers principally located throughout the mid-Atlantic region.
US WATS has annualized revenue of over $55 million.
     
     On November 10, 1997, Tel-Save Holdings, Inc. ("Tel-Save")
filed a Schedule 13D with the Securities and Exchange Commission
in which Tel-Save indicated that it had purchased more than 10
percent of the outstanding common stock of US WATS.  Tel-Save
stated that it believes that such stock ownership will enable Tel-
Save to influence the outcome of the proposed merger and that Tel-
Save does not favor the merger.  See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -
Recent Developments".

7.        Derivative Financial Instruments

     The Company uses derivative financial instruments to reduce
its exposure to market risks from changes in foreign exchange
rates and interest rates.  The Company does not hold or issue
financial instruments for speculative purposes.  The derivative
instruments used are currency forward contracts and interest rate
swap agreements.  These derivatives are non-leveraged and involve
little complexity.

     The Company enters into contracts to buy and sell foreign
currencies in the future in order to protect the U.S. dollar
value of certain currency positions and future foreign currency
transactions.  The fair value method is used to account for these
instruments.  Under the fair value method, changes in fair value
are recognized in the consolidated balance sheet as a component
of other accrued expenses, and in the consolidated income
statement as foreign currency gain or loss.  For reporting
purposes, the contractual assets or liabilities of the foreign
currency agreements are offset because the agreements provide for
a right of offset.  Any premiums or discounts related to foreign
currency contracts are amortized over the life of the contracts.
The Company enters into cross-currency rate swaps to hedge
intercompany debt from certain subsidiaries.  Under these
agreements, the Company typically pays a fixed rate of interest
on a foreign dollar note, and receives a variable rate of
interest on a U.S. dollar receivable.  The fair value method is
used to account for these instruments.  Under the fair value
method, the amounts receivable and payable are carried at their
fair value on the consolidated balance sheet as a component of
other receivables.  Changes in the fair value are recognized in
the consolidated income statement as foreign currency gain or
loss.  Interest due under the fixed contracts and interest
receivable under the variable contracts are recognized in the
consolidated income statement as a component of net interest
expense.

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," "Potential Adverse Effects of
Regulation," "Increasing Domestic and International Competition,"
"Expansion of Local Exchange Business," "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," "Risks Associated with Rapidly Changing
Industry," "Dependence on Key Personnel," "Risks Associated with
Financing Arrangements; Dividend Restrictions," "Holding Company
Structure; Reliance on Subsidiaries for Dividends,"  "Potential
Volatility of Stock Price," "Risks Associated with Derivative
Financial Instruments," "Currency Risks; Possible Effect on
Financial Condition, Operating Results and Financing Costs;
Exchange Controls," "International Tax Risks" and "Risks of Entry
into Cellular Business and Expansion of Internet, Paging and Data
Transmission Businesses," 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(per
minute charges for long distance services) 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
provision of local exchange services, including local dial tone,
direct access lines, Internet fees and monthly subscription fees,
and also from data services.  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 North American and European
operations during the three and nine month periods ended
September 30, 1997 and 1996:
<TABLE>

                    Three Months ended                Nine Months ended
                 September 30, 1997 and 1996        September 30, 1997 and 1996
               (dollars and minutes in thousands) (dollars and minutes in  thousands)
     
                     1997              1996                    1997                 1996
                  Amount    Percent   Amount    Percent        Amount    Percent    Amount    Percent

Total Revenue:
North America:
     <S>             <C>         <C>    <C>        <C>            <C>         <C>    <C>         <C>
     US              $ 30,873    32.5%  $ 23,107   29.9%          $ 83,282    31.2%  $ 71,840    32.0%
     Canada            28,192    29.6     29,804   38.6             87,582    32.8     87,371    39.0
Total North America    59,065    62.1     52,911   68.5            170,864    63.9    159,211    71.0
Europe:
     UK                34,506    36.3     24,374   31.5             94,857    35.5     65,016    29.0
     Germany            1,553     1.6       -       0.0              1,556     0.6        -       0.0
Total Europe           36,059    37.9     24,374   31.5             96,413    36.1     65,016    29.0
Total Revenue        $ 95,124   100%    $ 77,285  100%            $267,277    100%   $224,227   100%




Billable Long Distance Minutes of Use:
North America:
     US               211,102   35.1%   142,157    31.3%           554,644    33.0%   417,607    32.4%
     Canada           194,525   32.4    170,667    37.6            584,008    34.7    497,870    38.6
Total North America   405,627   67.5    312,824    68.9          1,138,652    67.7    915,477    71.0
Europe:
     UK               194,309   32.3    141,452    31.1            542,695    32.3    374,315    29.0
     Germany            1,362    0.2       -        0.0              1,362     0.1       -        0.0
Total Europe          195,671   32.5    141,452    31.1            544,057    32.3    374,315    29.0
Total Minutes         601,298  100%     454,276   100%           1,682,709   100%   1,289,792   100%
</TABLE>


     The following table presents certain information concerning
long distance toll revenue (net of intercompany revenue) per
billable minute and network cost per billable minute attributable
to the Company's North American and European operations during
the three and nine month periods ended September 30, 1997 and
1996:
                             Three Months Ended       Nine Months Ended
                                   September 30,       September 30,

                                    1997     1996   1997    1996

Toll Revenue Per Billable Long Distance Minute:
North America
     United States                $0.116   $0.141  $0.123   $0.155
     Canada                        0.121    0.152   0.127    0.154
Total North America                0.118   $0.147   0.125   $0.155
Europe
     United Kingdom               $0.177   $0.171  $0.174   $0.173
     Germany                       1.140     -      1.142      -
Total Europe                      $0.184   $0.171  $0.177   $0.173

Network Cost Per Billable Long Distance Minute:
Total North America               $0.081   $0.104  $0.085   $0.109
Total Europe                       0.113    0.114   0.111    0.117



     The Company believes that historically its revenue growth as
well as its network costs and results of operations for its U.S.,
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 regulatory environment in those
markets.  The Company entered the U.S, Canadian, and U.K
telecommunications markets in 1982, 1985, and 1993, respectively.
In 1997, the Company established a subsidiary in Germany, and
commenced offering long distance service as a switchless reseller
during the third quarter of 1997. The Company believes that toll
revenue per billable minute and network cost per billable minute
will be lower in future periods, and heavily influenced by
competitive pressures and regulatory actions.

     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 services and network
costs have been stabilizing during the past few years.  This may
change in the future as a result of the 1996 Amendment to the
U.S. Communications Act (the "1996 Act") that further opened the
market to competition, particularly from the regional Bell
operating companies ("RBOCs").  The Company has actively pursued
growth opportunities in the U.S. market.  During the third
quarter of 1997, the Company acquired VISTA International
Communications, Inc. ("VISTA").  VISTA, headquartered in Mount
Arlington, New Jersey, provides long distance and other services
to small to medium sizes commercial customers in the Northeastern
U.S. with concentrations primarily in New Jersey and
Pennsylvania.  The VISTA acquisition represents expansion into a
contiguous geographic area, and with a similar targeted customer
segment, which is viewed as consistent with the Company's
expansion strategy.

     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 and
1995.  Although revenue per minute increased from 1995 to 1996
due to changes in customer and product mix, revenue per minute
fell during the first half of 1997, and the Company expects such
downward pressure to continue. The impact of this pricing
pressure on revenues of ACC Canada is being offset by an increase
in the Canadian commercial 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, Internet services, and, since February
1997, paging services.

     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,
but the rate of growth is expected to decline.  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
opportunities for revenue growth could be impacted.  If ACC U.K.
were to experience increased revenues, the Company believes it
should be able to enhance its economies of scale and scope with
more efficient 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 UK'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. The Company has actively pursued growth opportunities in
the U.K. market.  During the second quarter of 1997, the Company
acquired Transphone Ltd. Transphone provides domestic and
international long distance service as a reseller, and is based
in London, U.K.  In acquiring Transphone Ltd., the Company
obtained what it believes is a strong base of commercial
customers in a desirable geographic area.  During the third
quarter of 1997 the Company also acquired United Telecom Ltd.
("UT").  UT provides domestic and international long distance
services through a pre-paid calling card platform in retail
telephone shops.  UT is based in London, U.K..  In acquiring UT,
the Company obtains what it believes is a new delivery channel in
a growing niche market.  The acquisition is also expected to
create network cost efficiencies, as UT's customers have peak
calling activity at night and on weekends. This calling pattern
will enable the Company to facilitate routing of off-peak traffic
over the Company's switched based network, thereby adding to
economies of scale.  The Transphone Ltd. and UT acquisitions are
expected to be accretive to earnings commencing in 1998.  The
foregoing forward looking statements are based upon expectations
with respect to customer behavior, market trends and the
Company's ability to successfully integrate and develop the
businesses acquired.  If such expectations are not realized,
actual results may differ materially from the foregoing
discussion.

     The German telecommunications market is expected to
substantially deregulate in January 1998, as a result of the
European Union ("EU") mandate to open telecommunications markets
to competition.  Most significantly, the German market is
scheduled to be open for interconnection in January 1998.  The
Company has established a subsidiary in Germany, and signed a
resale agreement with Deutsche Telekom ("DT") on May 20, 1997.
Further, the Company received a Class 4 full voice telephony
license from the German Ministry of Post and Telecommunications
which is effective January 1, 1998.  This license is a
requirement for the Company to become a switch-based provider of
telecommunications services in Germany.  In October 1997, the
Company signed a network interconnect agreement with Deutsche
Telekom, which will permit utilization of Deutsche Telekom's
networks to link ACC with its customers.  With this agreement in
place, the Company plans to install, and have in service, a
switch by the first quarter of 1998. The Company expects to
develop a small amount of revenue in the fourth quarter of 1997
as a switchless reseller, with potentially more substantial
revenue growth in 1998 as a switch-based reseller when the market
is fully deregulated.  The foregoing forward-looking statement is
based upon expectations with respect to regulatory actions and
cooperation from DT with regard to which the Company is unable to
control.  If such expectations are not realized, the expected
revenue growth from the German market may not materialize.  In
addition to the core growth expected from switch-based resale,
the Company has actively pursued other growth opportunities in
Germany.  During the third quarter of 1997, the Company acquired
Telenational Communications Deutschland Limited Partnership
("TNC"), a privately held telecommunications service provider
headquartered in Hamburg, Germany.  TNC provides prepaid calling
cards through affinity programs with large commercial customers
including Lufthansa, Citibank and Diners Club.  The TNC
acquisition provides the Company an existing customer base, and
facilitates the start up efforts in Germany.

     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 geographic markets.  The Company expects to
continue to expand the breadth and scale of its network and
related sales and marketing, customer support and operating
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 geographic markets.

     The Company recently announced the creation of two
continental operating divisions in North America and Europe.  In
conjunction with this new structure, the Company plans to further
expand its European operations as business activity more fully
develops in the deregulating German market and by entering other
telecommunications marketplaces when regulatory and market
conditions warrant.  While the Company has had a successful
history of entering into newly deregulated markets, there can be
no assurances that the same successes will be experienced in the
future.

     The Company has also expanded operations in the U.S. local
exchange business and anticipates that a significant portion of
its future growth will come from this business. The local
exchange business is highly competitive and includes several
larger, better capitalized local service providers, including
AT&T, among others, who can sustain losses associated with
discount pricing, and the high initial investment and expenses
typically incurred to attract local customers.  The Company's
U.S. local service business commenced operations in 1994 and
generated a small operating profit for the first nine months of
1997, and for the full year 1996.  However, there can be no
assurances that the Company will continue to achieve positive
cash flow or profitability in this business in the future.

     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. Revenues from wholesale
carriers accounted for approximately 18% and 30% of the revenues
of ACC North America and ACC Europe, respectively, in the third
quarter of 1997, and 18% and 28% for the nine months ended
September 30, 1997. Included in 1996 second quarter and nine
month revenues were $9 million of North American non-recurring
carrier revenues, or 4% of consolidated revenues.  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.  Carrier revenue for the third quarter of 1997 was 23%
of the Company's consolidated total revenue compared to 25% in
the third quarter of 1996, and 22% for the nine months ended
September 30, 1997 compared to 24% for the nine months ended
September 30, 1996.  Management believes that carrier revenue
will continue to average 20% to 25% 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 months ended
September 30, 1997 and 1996, and the nine months ended September
30, 1997 and 1996, certain Statement of Operations data expressed
as a percentage of total revenue:
<TABLE>
                                  Three Months ended            Nine Months ended
                               September30, 1997 and 1996    September 30, 1997 and 1996

                                     1997          1996       1997          1996

Revenue:
  <S>                                <C>            <C>        <C>          <C>
  Toll revenue                       88.2%          90.9%      89.3%        92.0%
  Local service and other            11.8            9.1       10.7          8.0
  Total revenue                     100.0          100.0      100.0        100.0
Network costs                        57.6           63.2       58.7         64.1
Gross profit                         42.4           36.8       41.3         35.9
Other operating expenses:
  Depreciation and amortization       6.2            5.5        6.1          5.4
  Selling, general and administrativ 29.2           27.2       28.5         26.3
  Total other operating expenses     35.4           32.7       34.6         31.7
Income  from operations               6.9            4.2        6.7          4.2
Total other income (expenses)        (0.6)          (0.2)      (0.8)        (1.1)
Income from operations before provision
  for income taxes and minority
  interest                            6.3            3.9        5.9          3.0
Provision for income taxes            1.1            0.7        0.9          0.6
Income before minority interest       5.2            3.2        5.0          2.4
Minority interest in (income)
  loss of consolidated subsidiary      -            (0.4)        -          (0.4)
Income (loss) from operations         5.2%           2.8%       5.0%         2.0%
</TABLE>


Quarter ended September 30, 1997 compared with quarter ended
September 30, 1996

REVENUE  Total revenue for the quarter ended September 30, 1997
increased $17.8 million, or 23%, to $95.1 million from $77.3
million for the same period in 1996.  Long distance toll revenue
increased $13.7 million, or 19%, to $83.9 million from $70.2
million, and local service and other revenue increased $4.1
million, or 59%, to $11.2 million from $7.1 million.  The growth
in long distance toll revenues was fueled by a 32% increase in
billable minutes. Revenue from wholesale carriers during the
current quarter increased slightly to $21.5 million (23% of total
revenues) from $19.1 million (25% of total revenues)for the same
period in 1996.  Significantly reduced revenues from two Canadian
carriers were realized in the current quarter, accounting for a
$3.8 million reduction in carrier revenues from the same quarter
in 1996. Excluding total wholesale carrier revenues, long
distance toll revenue for the current quarter increased 22% from
the same period in 1996.  Long distance toll revenue per billable
minute for the current quarter decreased 10%, from $.155 to
$.140, largely a result of competitive pricing pressures.  The
growth in other revenues is largely attributable to growth in
market share in the competitive local exchange business in the
U.S.

Total revenue (unaffiliated) in North America for the current
quarter increased 12% from the same period in 1996. Long distance
toll revenue (unaffiliated) increased 4% from 1996.  Excluding
carrier revenues, long distance toll revenue for the current
quarter increased 14% from the same period in 1996, and is
attributable to growth in minutes and customer accounts. Long
distance toll revenue per minute for the current quarter
decreased 19% from $.147 to $.118, largely a result of
competitive pricing pressures in both the U.S. and Canada.
Retail price pressures in each market are expected to continue,
which may impact the Company's margin. Local service and other
revenues for the current quarter increased 59% over the same
period in 1996, a result of growth in U.S. local exchange
revenues and increased Internet related revenues in Canada.  The
Company continues to invest in the local exchange business,
having installed switches during 1997 in Buffalo, Albany, New
York City, Boston and Springfield Massachusetts. Continued
expansion and growth in non toll revenue, including local
exchange service, Internet and other services is expected to
become a larger component of total revenues in future periods.
As a percent of total revenue, non toll revenue for the current
quarter was 12% compared to 9% for the same period in 1996.

Total revenue (unaffiliated) in Europe (substantially all long
distance toll revenue) for the current quarter increased 48% from
the same period in 1996.  Excluding carrier revenues, long
distance toll revenue for the current period increased 36% from
the same period in 1996, and is attributable to growth in minutes
and commercial and student customers accounts.  Long distance
toll revenue per billable minute for the current quarter
increased 7% from $.171 to $.184 as increased international
traffic (which typically has higher rates per minute) and the
impact of higher revenues from carriers offset retail price
reductions implemented during the quarter for international and
domestic long distance rates.  The German operating unit
contributed a modest amount of revenue from the acquired TNC
customer base as well as from switchless resale activity.

  NETWORK COST  Network cost for the quarter ended September 30,
1997 increased $6.0 million, or 12%, to $54.8 million from $48.8
million for the same period in 1996.  As a percent of revenue,
network cost for the current quarter was 58% compared to 63% for
the same period in 1996.  Network cost per billable minute for
the current quarter decreased 15%, from $.107 to $.091.  The
reduction of current quarter network cost as a percent of
revenue, and per minute, is largely attributable to a favorable
shift in business/customer mix, as higher margin local exchange
revenues constitute a higher percent of revenues in 1997 as
compared to 1996, declining access rates for origination and
termination, and internal network efficiencies.

Network cost in North America for the current quarter as a
percent of unaffiliated revenue decreased to 57% from 62% for the
same period in 1996, and per billable minute also decreased 23%
from $.104 to $.081.  These improvements resulted from the
aforementioned increased in higher margin local exchange revenue
in the U.S., and internal network efficiencies.  Network cost in
Europe for the current quarter as a percent of unaffiliated
revenue decreased to 59% from 66% for the same period in 1996,
and per billable minute declined by .001%.  Recent investments in
switches, a microwave network and IRU are expected to more
significantly lower network costs in the near term, as ownership
of these facilities will enable the company to reduce reliance on
leased lines and increase network capacity.  This forward looking
statement is based on expectations regarding customer demand and
the relative cost and availability of leased lines and
alternative transmission facilities in the Company's markets, and
could be adversely impacted by competitive pricing pressures.  If
such expectations are not realized, the Company's
actual results may differ materially from the foregoing
discussion.

OTHER OPERATING EXPENSES - DEPRECIATION AND AMORTIZATION Total
depreciation expense for the quarter ended September 30, 1997
increased $1.6 million, or 39%, from $4.3 million for the same
period in 1996, largely attributable to recent local and long
distance switch installations and other capital expenditures, as
well as higher amortization of the customer base and goodwill
associated with the recent acquisitions of Transphone, United
Telecom, VISTA and TNC.

OTHER OPERATING EXPENSES - SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES  Total Selling, General and Administrative expenses
("SG&A") for the quarter ended September 30, 1997 increased $6.8
million, or 32%, to $27.8 million from $21.0 million for the same
period in 1996.  As a percent of revenue, SG&A increased 2% to
29% from 27%.  This increase is largely attributable to higher
selling expenses (i.e. agent, salesperson and other commissions)
associated with growth in local exchange revenues, added overhead
from acquired entities and infrastructure costs to support
expansion in Germany.

OTHER INCOME/EXPENSES  Net interest expense for the quarter ended
September 30, 1997 increased $.4 million compared to 1996 as a
result of increased utilization of the credit facility to fund
expansion.  Foreign exchange gains/losses reflect changes in the
value of amounts borrowed by the foreign subsidiaries from ACC
Corp. and ACC US.  The Company continues to hedge substantially
all intercompany loans to foreign subsidiaries in an attempt to
reduce the impact of transaction gains or losses.  The Company
does not engage in speculative foreign currency transactions.
During the quarter ended September 30, 1997 the Company
recognized gains on foreign currency transactions of $20,000
compared to $22,000 for the same period of 1996.

PROVISION FOR TAXES  Provision for taxes for the quarter ended
September 30, 1997 increased $.6 million, from $.5 million to
$1.1 million.  Stated as a percent of pre-tax income, the
effective tax rate for the current quarter was 18% as compared to
18% for the same period in 1996.  Income taxes are provided on
all revenues in excess of available net operating loss
carryforwards ("NOL's") at the statutory rate applicable for each
country.  The Company continues to utilize NOL's to offset
taxable income generated in Canada and the U.K.  The increase in
operating earnings in both of these subsidiaries, which is not
subject to tax due to utilization of NOL's, reduces the effective
tax rate for the consolidated Company.

MINORITY INTEREST IN (EARNINGS) OF CONSOLIDATED SUBSIDIARY
Minority interest for the quarter ended September 30, 1996
reflects the portion of the Company's Canadian subsidiary's
income attributable to the approximately 30% of that subsidiary's
common stock that was publicly traded in Canada.  Prior to
December 31, 1996, the Company repurchased approximately 24% of
the outstanding shares, and the remaining 6% was repurchased in
January 1997.  As a result, the Canadian subsidiary is currently
100% owned, with no remaining minority interest.

The Company's income from operations for the quarter ended
September 30, 1997 was $6.6 million compared to $3.2 million for
the same period in 1996, and was comprised of the following:
North America operations $4.1 million as compared to $2.5 million
in 1996, and European operations, $2.5 million as compared to $.7
million in 1996.


Nine months ended September 30, 1997 compared with nine months
ended September 30, 1996

REVENUE  Total revenue for the nine months ended September 30,
1997 increased $43.0 million, or 19%, to $267.3 million from
$224.2 million for the same period in 1996.  Long distance toll
revenue increased $32.2 million, or 16%, to $238.6 million from
$206.4 million, and local service and other revenue increased
$10.8 million, or 61%, to $28.7 million from $17.9 million.  The
growth in long distance toll revenues was fueled by a 30%
increase in billable minutes.  Revenue from wholesale carriers
during the current period increased to $58.3 million (22% of
total revenues) from $54.2 million (24% of total revenues)for the
same period in 1996.  Significantly reduced revenues from two
Canadian carriers were realized in the current period, accounting
for a $10.0 million reduction in carrier revenues from the same
period in 1996.  Additionally, the 1996 period reflects $9
million of non recurring carrier revenues.  Excluding total
wholesale carrier revenues, long distance toll revenue for the
current period increased 19% from the same period in 1996.  Long
distance toll revenue per billable minute for the current period
decreased 11%, from $.160 to $.142, largely a result of
competitive pricing pressures.  The growth in other revenues is
largely attributable to growth in market share in the competitive
local exchange business in the U.S. and a full nine months of
revenues in 1997 from Internet revenues in Canada compared to
four months in 1996.

Total revenue (unaffiliated) in North America for the current
period increased 7% from the same period in 1996. Long distance
toll revenue (unaffiliated) increased 1% from 1996, as the 1996
period included $9 million of non recurring carrier revenue.
Excluding carrier revenues, long distance toll revenue for the
current period increased 12% from the same period in 1996, and is
attributable to growth in minutes and customer accounts. Long
distance toll revenue per minute for the current period decreased
19% from $.155 to $.125, largely a result of competitive pricing
pressures in both the U.S. and Canada. Retail price pressures in
each market are expected to continue which may impact the
Company's margin.  Local service and other revenues for the
current period increased 61% over the same period in 1996, a
result of growth in U.S. local exchange revenues and increased
Internet related revenues in Canada.  The Company continues to
invest in the local exchange business, having installed switches
during 1997 in Buffalo, Albany, New York City, Boston and
Springfield Massachusetts. Continued expansion and growth in non
toll revenue, including local exchange service, Internet and
other services is expected to become a larger component of total
revenues in future periods.  As a percent of total revenue, non
toll revenue for the current period was 11% compared to 8% for
the same period in 1996.

Total revenue (unaffiliated) in Europe (substantially all long
distance toll revenue) for the current period increased 48% from
the same period in 1996.  Excluding carrier revenues, long
distance toll revenue for the current period increased 30% from
the same period in 1996, and is attributable to growth in minutes
and commercial and student customer accounts. Long distance toll
revenue per billable minute for the current period increased 2%
from $.173 to $.177 as the impact of higher revenues from
carriers partially offset retail price reductions implemented
during the period for international and domestic long distance rates.
The German operating unit contributed a modest amount of revenue
from the acquired TNC customer base as well as from switchless resale
activity.

NETWORK COST   Network cost for the nine months ended September
30, 1997 increased $13.2 million, or 9%, to $157.0 million from
$143.8 million for the same period in 1996.  As a percent of
revenue, network cost for the current period was 59% compared to
64% for the same period in 1996.  Network cost per billable
minute for the current period decreased 16%, from $.111 to $.093.
The reduction of current period network cost as a percent of
revenue, and per minute, is largely attributable to reduced
contribution charges enacted during the period in Canada, a
favorable shift in business/customer mix, as higher margin local
exchange revenues constitute a higher percent of revenues in 1997
as compared to 1996, and lower margin wholesale carrier revenues
constitute a lower percentage of 1997 revenues as compared to
1996, declining access rates for origination and termination and
internal network efficiencies.

Network cost in North America for the current period as a percent
of unaffiliated revenue decreased to 58% from 63% for the same
period in 1996, and per billable minute also decreased from $.109
to $.085.  These improvements resulted from the aforementioned
reduction in Canadian contribution charges, increased amount of
higher margin local exchange revenue in the U.S., and internal
network efficiencies.  Network cost in Europe for the current
period as a percent of unaffiliated revenue decreased to 60% from
67% for the same period in 1996, and per billable minute
decreased from $.117 to $.111.  Recent investments in switches, a
microwave network and IRU are expected to more significantly
lower network costs in the near term, as ownership of these
facilities will enable the Company to reduce reliance on leased
lines and increase network capacity.  This forward looking
statement is based on expectations regarding customer demand and
the relative cost and availability of leased lines and
alternative transmission facilities in the Company's markets, and
could be adversely impacted by competitive pricing pressures.  If
such expectations are not realized, the Company's
actual results may differ materially from the foregoing
discussion.

OTHER OPERATING EXPENSES - DEPRECIATION AND AMORTIZATION  Total
depreciation expense for the nine months ended September 30, 1997
increased $4.3 million, or 36%, from  $12.1 million for the same
period in 1996, largely attributable to recent local and long
distance switch installations and other capital expenditures, as
well as higher amortization of the customer base and goodwill
associated with the Internet Canada acquisition in 1996, and
recent acquisitions of Transphone, United Telecom, VISTA and TNC.

OTHER OPERATING EXPENSES - SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES  Total Selling, General and Administrative expenses
("SG&A") for the nine months ended September 30, 1997 increased
$17.1 million, or 29%, to $76.1 million from $59.0 million for
the same period in 1996.  As a percent of revenue, SG&A increased
2% to 28% from 26%.  This increase is largely attributable to
higher selling expenses (i.e. agent, salesperson and other
commissions) associated with growth in local exchange revenues,
added overhead from acquired entities and infrastructure costs to
support expansion in Germany.

OTHER INCOME/EXPENSES  Net interest expense for the nine months
ended September 30, 1997 decreased $.7 million.  Foreign exchange
gains/losses reflect changes in the value of amounts borrowed by
the foreign subsidiaries from ACC Corp. and ACC U.S. The Company
continues to hedge substantially all intercompany loans to
foreign subsidiaries in an attempt to reduce the impact of
transaction gains or losses.  The Company does not engage in
speculative foreign currency transactions.  During the nine
months ended September 30, 1997 the Company recognized losses on
foreign currency transactions of $168,000 compared to a $48,000
gain in the same period of 1996.

PROVISION FOR TAXES  Provision for taxes for the nine months
ended September 30, 1997 increased $1.0 million from $1.4 million
to $2.4 million. Stated as a percent of pre-tax income, the
effective tax rate for the current period was 15% as compared to
20% for the same period in 1996.  Income taxes are provided on
all revenues in excess of available net operating loss
carryforwards ("NOL's") at the statutory rate applicable for each
country. The Company continues to utilize NOL's to offset taxable
income generated in Canada and the U.K..  The increase in
operating earnings in both of these subsidiaries, which is not
subject to tax due to utilization of NOL's, reduces the effective
tax rate for the consolidated Company.

MINORITY INTEREST IN (EARNINGS) OF CONSOLIDATED SUBSIDIARY
Minority interest for the nine months ended September 30, 1996
reflects the portion of the Company's Canadian subsidiary's
income attributable to the approximately 30% of that subsidiary's
common stock that was publicly traded in Canada.  Prior to
December 31, 1996, the Company repurchased approximately 24% of
the outstanding shares, and the remaining 6% was repurchased in
January 1997.  As a result, the Canadian subsidiary is currently
100% owned, with no remaining minority interest.

The Company's income from operations for the nine months ended
September 30, 1997 was $17.8 million compared to $9.4 million for
the same period in 1996, and was comprised of the following:
North America operations $11.2 million as compared to $8.9
million in 1996, and European operations $6.6 million as compared
to ($.4) million in 1996.




Liquidity And Capital Resources

     In May 1996, the Company raised net proceeds of $63.1
million through an offering of Common Stock.  The proceeds from
this offering were used to repay indebtedness under the Credit
Facility, for working capital needs, and capital expenditures.
The Company also expended $32.1 million in 1996 to repurchase the
minority interest in ACC Canada.  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 $1.9 million from the exercise of options and
warrants by selling shareholders in the October 1996 secondary
Common Stock offering and an additional $4.9 million from the
exercise of employee stock options at various times during the
year.

     In January 1997, the Company entered into an amended and
restated $100 million credit facility, subject to availability
under a borrowing base formula and certain other conditions
(including borrowing limits based on the Company's operating cash
flow).  As of September 30, 1997, the unused amount under the
Credit Facility was approximately $24.1 million.

     Net cash flows used in operations for the nine months ended
September 30, 1997 were $14.2 million compared to $1.6 million
for the same period in 1996.  The increase of $12.6 million
primarily resulted from $18.2 million of higher payments of
previously accrued expenses associated with the Canadian minority
interest repurchase and accrued year-end bonuses, and
expenditures for other non-current assets (including an IRU for
$5.2 million), partially offset by higher net income of $8.8
million and depreciation of $4.3 million, and other changes to
working capital.

     Net cash flows used in investing activities (for capital
expenditures, acquisition of customer base and subsidiaries) for
the nine months ended September 30, 1997 were $58.0 million
compared with $17.1 million for the same period in 1996.

     Net cash provided by financing activities for the nine
months ended September 30, 1997 was $68.1 million compared with
$41.7 million for the same period of 1996.  The increase reflects
utilization of the Credit Facility to fund working capital needs,
capital expenditures and acquisitions.

     The Company's principal need for working capital is to fund
network costs and to meet its selling, general and administrative
expenses as its business expands.  In addition, the Company's
capital resources have been used for acquisitions (i.e.,
Metrowide Communications, Internet Canada, Transphone Ltd.,
United Telecom, VISTA and TNC), capital expenditures, and the
repurchase of the minority interest in ACC Canada.  The Company
has historically reflected working capital deficits at the end of
the last several years but, at September 30, 1997, reflected a
working capital surplus of approximately $17.0 million compared
to a deficit of approximately $15.5 million at December 31, 1996,
due primarily to utilization of the Credit Facility to satisfy
current liabilities.

     The Company anticipates that, throughout the remainder of
1997, its capital expenditures will be approximately $25 million
for the expansion of its network, acquisitions, 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.  Approximately $35
million in capital expenditures were recorded during the nine
months ended September 30, 1997.  ACC expects that it will
continue to make significant capital expenditures during future
periods, particularly for switching equipment for the U.K. and
Germany, and for local exchange switches in U.S markets, and
related costs.  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.

     As of September 30, 1997, the Company had approximately $-0-
of cash and cash equivalents and maintained the $100 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 $72 million
was outstanding. The maximum aggregate principal amount of the
Credit Facility is required to be reduced by $8 million per
quarter commencing on March 31, 1999 until December 31, 2000, and
by $9 million per quarter commencing on March 31, 2001 until
maturity of the loan in January 2002.

     In addition, as of September 30, 1997, the Company had $4.8
million of capital lease obligations which mature at various
times from 1997 through 2000.  During the nine months ended
September 30, 1997,  the Company prepaid a $4.0 million
capitalized lease obligation using funds from the Credit
Facility.  The Company's financing arrangements, which are
secured by substantially all of the Company's assets including
stock of certain subsidiaries, require the Company to maintain
certain financial ratios.

     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
U.S. dollar 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, 1997 was $79.9 million.  From
time to time, the Company uses interest rate swap agreements to
reduce its 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, 1997,
in management's opinion there was no significant risk of loss due
to 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.  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 is currently negotiating an amendment to its
Credit Facility to increase the borrowing availability by an
additional $50 million.  The Company believes that, under its
present business plan, the amended Credit Facility which it 
expects to obtain, and cash from operations will be sufficient 
to meet anticipated working capital, capital expenditure 
requirements and expansion plans for the foreseeable future.  
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 future periods.  In addition, the Company may have to
refinance a substantial amount of indebtedness and obtain
additional funds prior to 2002, when the Credit Facility matures.
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.  There can be no
assurance that the Company will be able to raise such capital on
acceptable terms or at all. The Company's ability to obtain
additional sources of capital will depend upon, among other
things, its financial condition at the time, the restrictions and
the instruments governing its indebtedness and other factors,
including market conditions, beyond the control of the Company.
Additional sources of capital may include public and private
equity and debt financings, sale of assets, capitalized leases
and other financing arrangements.  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
Company's creditors.  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 creditors.


Recent Developments

     On October 30, 1997, ACC announced that it had received an
unsolicited proposal from Tel-Save Holdings, Inc. ("Tel-Save")
regarding a potential business combination with Tel-Save.  Tel-
Save's original proposal was to offer to ACC shareholders $50 in
Tel-Save common stock per share of ACC common stock, subject to
adjustment, or $40 per share if the proposed merger involving ACC
and US WATS, Inc. ("US WATS") is effected.  Tel-Save has
subsequently announced that the purchase price proposed by Tel-
Save will not be reduced based on the outcome of the proposed
merger involving ACC and US WATS.

     The Board of Directors of ACC has confirmed that it has
initiated a review of the Tel-Save proposal as well as other
alternatives available to the Company.  The Company also
announced that the Company's Shareholder Rights Plan has been
amended to reduce the threshold by which the rights granted under
the plan become exercisable from 15 percent to 7.5 percent.  Any
shareholder whose ownership exceeds 7.5 percent on November 6,
1997, and who does not acquire additional shares, is exempt from
the amendment.  The amendment is effective until December 31,
1997.





PART II. OTHER INFORMATION




Item 6.   Exhibits and Reports on Form 8-K.

     (a)  Exhibits.  See Exhibit Index.




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, 1997               /s/ Michael R. Daley
                                        Michael R. Daley
                                        Executive Vice President
                                        and Chief Financial
                                        Officer


Dated:  November 13, 1997               /s/ Frank C. Szabo
                                        Frank C. Szabo
                                        Vice President and
                                        Controller

EXHIBIT INDEX

Exhibit Number      Description                   Location

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

27.1           Financial Data Schedule       Filed herewith

99.1           Company Risk Factors          Filed herewith


