We intend to engage in a business of:

• Licensing and granting sub-easements for the construction of fiber optic cable communication systems in existing rights-of-way;

• Owning and leasing or selling strands of "dark" fiber optic cable and conduits; and

• Related business activities.

Optical fibers are solid strands of hair-thin, high quality glass, which are usually combined to form cables for transmitting information via light pulses from one point to another. The fibers consist of a core of high-purity glass that transmits light encased within a covering layer designed to reduce signal loss through the sidewalls of the fibers. Information transmitted through optical fibers is converted from electrical impulses into light waves by a laser or light emitting diode. At the point of reception, the light waves are converted back into electrical impulses by a photo-detector.

Communication by means of light waves guided through glass fibers offers a number of advantages over conventional means of transmitting information. Glass fibers carry significantly more information than metallic conductors and, unlike metallic conductors, are not subject to electromagnetic or radio frequency interference. Signals of equal strength can be transmitted over much longer distances through optical fibers than through metallic conductors and require the use of fewer repeaters (devices which strengthen a signal). Further, fiber optic cables, which typically consists of numerous optical fibers encased in one or more plastic sheaths, are substantially smaller and lighter than metallic conductor cables of the same capacity, so they can be less expensive and more easily installed, particularly in limited conduit or duct spaces.

"Dark" fibers are fiber strands contained within a fiber optic cable that is not connected to transmission equipment. We expect our dark fiber customers will install their own electrical and optical transmission equipment. A lease of dark fiber rights typically has a term that approximates the economic life of a fiber optic strand (generally 20 to 30 years). We may also lease fiber optic strands for shorter periods.

We believe that the market for dark fiber services is characterized by significant and growing demand for, and limited, although growing, supply of, fiber optic capacity. The demand has been fueled by growth of the Internet and the accompanying demand for faster communications, greater capacity and higher bandwidth than can be provided by metallic conductor connections. We believe demand will increase as a result of improvements in "last mile" technologies including digital lines and cable modems. Fiber optic cables are replacing the copper wires used for the nationwide communications system.

Our objective is to assemble and market a network of fiber optic corridors, with full legal rights for the use of the land for fiber optic cable installation. Almost all fiber optic networks installed or being installed to date largely rely on leases or licenses from railroads, pipeline companies or other utilities. Often, these companies do not own all of the real estate over which the network is installed, but only have a right of way or easement limited to a use that does not include telecommunications cables. When fiber optic cables are placed on the right of way or easement, they are subject to legal challenges by the landowners. Some cable installers have lost legal challenges to their rights to install and maintain fiber optic cable on rights of way or easements created for other purposes.

The historic installation of the fiber optic networks without paying landowners has been inequitable to the landowners along the rights-of-way where the fiber is installed. These landowners often have significant legal rights to that right-of-way that have been ignored. Instead, all of the right-of-way value is captured by the current user (the railroad, pipeline or utility) who is paid a fee by the fiber optic company. Absent litigation, the landowners along the right-of-way may see no share of the fees. The ultimate challenge is how to get fair compensation into the hands of the landowners.

Because a corridor may have tens of thousands of adjoining landowners, companies seeking to install fiber optic cables for a network face the possibility of thousands of separate legal challenges and negotiations to settle their rights to install fiber optic cable along a corridor. A successful challenge to an existing network could result in expensive disruption of business or rerouting of cables around the property of the objecting landowner.

Absent some agreement among all landowners, the separate landowners and the holders of the limited rights of way or easements have no practical ability to create a lawful contiguous corridor for fiber optic installation. An efficient way of creating a contiguous corridor that would be of far greater value than the individual parcel and addressing the compensation issue for individual landowners is needed. This settlement answers that challenge. It clears the way for the use of the right-of-way, while capturing compensation for each landowner along the way.

We believe that still greater value can be achieved for our members by combining the assets of the Company with those of other owners of dark fiber optic cable or conduits into a nationwide network. We may combine assets with other corridor entities by means of:

• Joint ventures;
• Management agreements with management companies with similar agreements with other corridor entities;
• Mergers; or
• Other means that would allow exploitation of the assets of multiple entities as a single business.

This litigation is one of 34 class actions being asserted and prosecuted by the settlement class counsel against railroads and telecommunications companies. Each of those actions has the potential for a similar resolution as that agreed to here. If similar agreements are reached, they may enhance the value of the assets in each individual settlement.

The settlement class counsel have asserted proprietary rights in the intellectual property constituting the business process for creating a real estate network from multiple parcels. They have filed a patent application, which is pending. The Company and other corridor entities created as a result of other class action litigation prosecuted by the settlement class counsel will have a license to the process covered by the patent.

The railroad corridors comprise approximately 2522 miles of right-of-way connecting cities in the Southeast, Midwest and Northeast United States. The following table sets forth the cities connected and the mileage between them:

On October 23, 2000, T-Cubed announced that it had entered into a long-term transaction with Dominion Telecom to sublease right-of-way and purchase conduit along the Detroit-Toledo, Chicago-Harrisburg and Harrisburg-Alexandria corridors. T-Cubed stated that it expects the project to be completed by mid-year 2001. The agreement between T-Cubed and Dominion Telecom also includes options for other corridors, including, Atlanta-Jacksonville, Atlanta-Chattanooga, and Chattanooga-Memphis.

On October 24, 2000, T-Cubed announced that it had entered into an agreement with 360Networks to jointly install and market fiber optic cable infrastructure. According to T-Cubed, the corridors covered by the agreement include Chicago-Detroit and Atlanta-Jacksonville. T-Cubed stated that it expects the projects to be complete by the third quarter of 2001, and that fiber optic cable and conduits have already been sold to customers along those corridors. T-Cubed also stated that the agreement may be extended to cover other corridors. We have been informed by T-Cubed that it has entered into contracts pursuant to which third parties are obligated to acquire at least three conduits on approximately 1,477 miles of settlement corridors.

As of April 1, 2001, construction had begun on the following corridors:

• Atlanta to Jacksonville
• Atlanta to Chattanooga
• Detroit to Toledo
• Chicago to Harrisburg
• Harrisburg to Alexandria

Upon completion of the projects described in the two announcements by T-Cubed, we believe we will have the right to cause T-Cubed to transfer fiber optic strands to us in accordance with the Settlement Agreement. See The Settlement Agreement --"Property to be transferred to the Company." However we cannot assure that T-Cubed will complete the projects, or if they are completed, that the conditions under the Settlement Agreement for the transfer of fiber optic cable to us will have been met. See Risk Factors.

We expect growth in the high-bandwidth telecommunications industry to continue over the long term due to a number of factors, which include:

• Innovations and Advances in Transmission Technology. Technological innovations continue to increase the capacity and speed of advanced fiber optic networks while decreasing the cost of transmission allowing for continued growth in Internet usage and increases in the number of network users. This increased capacity and speed has resulted in the development of bandwidth-intensive applications. Improvements in "last mile" technology, such as DSL, cable modems and fixed and 3G wireless access are contributing to the significant increase in the number of subscribers using such applications. In addition, the anticipated proliferation of wireless Internet and data technologies and devices such as 3G broadband technology are also expected to contribute to increases in demand for bandwidth.
• Deregulation of the Telecommunications Industry, Which Has Resulted in a Proliferation of Service Providers. The telecommunications industry continues to experience liberalization on a global basis.

However, authors of recent articles in the Wall Street Journal and other publications have stated their belief that a glut of fiber optic capacity may be developing. See Risk Factors--Prices for fiber may decline.

We expect to generate revenue through contracts for the sale, lease or grant of long-term rights of use for dark fiber or conduit along one or more segments of our network. In the case of a sale, title to the fiber or conduit will immediately pass to the participant. A long-term right of use typically will have a term, at the end of which, title may be passed to the user. We also intend to lease dark fiber or conduit for a term less than the period for which a long-term right of use is typically granted. Leases normally will be structured with monthly payments over the term of the lease. We expect to realize a premium in lease pricing for bearing the risk that the lease will not be renewed for the balance of the life of the asset.

Potential customers for our dark fiber and conduits include:

• Long distance companies;
• Incumbent local exchange carriers;
• Competitive local exchange carriers;
• Internet service providers;
• Application service providers;
• Large organizations with enterprise network needs;
• Multi-service operators; and
• Local multipoint distribution service providers.

Potential customers typically buy or lease fiber optic capacity with which they develop their own communications networks or satisfy a need for redundant capacity. Our network will provide such customers with a low-cost alternative to building their own infrastructure or purchasing metered services from communications carriers. Our customers will be able to buy or lease fiber optic capacity on a segmented basis or along our entire network. We believe that our potential customers have a limited choice of independent service providers capable of offering high-capacity, reliable, secure and cost-effective services.

The Company's competitors will include, among others, the following companies:

• Verizon;
• T-Cubed;
• 360Networks;
• AT&T Corp.;
• Sprint Corp.;
• Williams Communications, Inc.;
• Level 3 Communications, Inc.;
• Qwest Communications, Inc.;
• MCI Worldcom; and
• Global Crossing.

In addition, as the regional Bell operating companies gain authority to enter into long distance service markets, they may be able rapidly to offer competitive services over region-wide fiber optic networks that already are in place. Competition is expected to increase in the future as additional providers of fiber optic networks enter or expand in the market. In the future, the Company may be subject to more intense competition due to the development of new technologies, an increased supply of domestic and international transmission capacity, and consolidation among and between local and long distance carriers.

The continuing trend toward business combinations and alliances in the telecommunications industry is also creating significant new or more powerful competitors. The acquisition of GTE by Bell Atlantic, the acquisition of US West by Qwest, the acquisition of Ameritech by SBC, the merger of WorldCom and MCI, AT&T's acquisitions of Telecommunications, Inc. and Teleport Communications Group, Global Crossing's acquisition of Frontier Communications, and SBC's acquisition of SNET are examples of some of the business combinations that have been formed recently. Many of these combined entities have, or will have, resources far greater than the Company's. Many firms are entering into joint marketing agreements and forming strategic business alliances whose human and capital resources cannot be rivaled. These combined entities may, now or in the future, be able to lease dark fiber sooner and at more competitive rates than the Company.

• Initial cash payments which will be distributed to cable-side class members;
• Dark fibers or cash under a note from T-Cubed;
• An option to purchase a conduit; and
• Easements on the non-cable side of the railroad corridors.

We are not involved in any legal proceedings other than the class litigation with T-Cubed.

We believe that we will not be a "telecommunications carrier" or "common carrier" with respect to our leasing of dark fiber facilities or conduits, and therefore that our activities will not be subject to special legal requirements applicable to such carriers. First, the Federal Communications Commission has said that leasing dark fiber is not a "telecommunications service" that is subject to FCC regulation. The FCC considers dark fiber a "network element." The FCC generally regulates "communication by wire or radio" or the "transmission" of "information of the users" choosing," neither of which describes the leasing of dark fiber facilities. Second, we will not offer dark fiber facilities as a common carrier, i.e., to all potential users on an indiscriminate basis. Instead, we will enter into individualized negotiations on a selective basis with prospective lessees of our dark fiber facilities to determine whether and on what terms to serve each potential lessee. Our dark fiber offerings should therefore not be subject to the common carrier jurisdiction of the FCC or to the common carrier provisions of the Communications Act.

If our offering of dark fiber facilities were deemed to constitute "telecommunications," then our revenues from such leases to end users (but not to other telecommunication carriers), whether or not provided on a common carrier basis, would become subject to assessment for the FCC's Universal Service Fund to assist in ensuring the universal availability of basic telecommunications services at affordable prices, and other FCC assessments. We may also be liable for assessments by state commissions for state universal service programs.