<PAGE>   1
   As filed with the Securities and Exchange Commission on December 18, 1998
                                                     Registration No. 333-______
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               -------------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933
                               -------------------

                          ABOVENET COMMUNICATIONS INC.
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                <C>                            <C>       
            DELAWARE                           4813                   77-0424796
  (State or other jurisdiction     (Primary Standard Industrial      (IRS Employer
of incorporation or organization)   Classification Code Number)   Identification No.)
</TABLE>

                     50 W. SAN FERNANDO STREET, SUITE #1010
                           SAN JOSE, CALIFORNIA 95113
                                 (408) 367-6666
               (Address of principal executive offices) (Zip Code)
                               -------------------

             ABOVENET COMMUNICATIONS INC. 1998 STOCK INCENTIVE PLAN
         ABOVENET COMMUNICATIONS INC. 1998 EMPLOYEE STOCK PURCHASE PLAN
                  ABOVENET COMMUNICATIONS INC. 1997 STOCK PLAN
               ABOVENET COMMUNICATIONS INC. 1996 STOCK OPTION PLAN
     SHARES ACQUIRED UNDER WRITTEN COMPENSATION AGREEMENT WITH SHERMAN TUAN
      SHARES AND OPTIONS GRANTED UNDER WRITTEN COMPENSATION AGREEMENT WITH
                                WARREN J. KAPLAN
                            (Full title of the Plans)
                               -------------------

                                  SHERMAN TUAN
                              CHAIRMAN OF THE BOARD
                           AND CHIEF EXECUTIVE OFFICER
                          ABOVENET COMMUNICATIONS INC.

                     50 W. SAN FERNANDO STREET, SUITE #1010
                           SAN JOSE, CALIFORNIA 95113
                     (Name and address of agent for service)
                                 (408) 367-6666
          (Telephone number, including area code, of agent for service)
                               -------------------

<TABLE>
<CAPTION>
                                  CALCULATION OF REGISTRATION FEE
============================================================================================================
         Title of                                         Proposed Maximum  Proposed Maximum
        Securities                          Amount           Offering          Aggregate         Amount of
           to be                             to be             Price            Offering        Registration
        Registered                       Registered(1)       per Share          Price(2)            Fee
        ----------                       -------------    ----------------  ----------------    ------------
<S>                                     <C>               <C>               <C>                 <C>

AboveNet Communications Inc.
1998 Stock Incentive Plan
    Options                                1,562,500            N/A                N/A               N/A
    Common Stock (par value $.001)      1,562,500 shares     $12.9375(2)     $20,214,843.75(2)     $5,619.73

AboveNet Communications Inc.
1998 Employee Stock Purchase Plan
    Common Stock (par value $.001)       156,250 shares      $12.9375(2)      $2,021,484.38(2)       $561.98
</TABLE>


<PAGE>   2
<TABLE>
<S>                                     <C>               <C>               <C>                 <C>
AboveNet Communications Inc.
1997 Stock Plan and 
AboveNet Communications Inc.
1996 Stock Option Plan 
Options                                  1,433,159               N/A              N/A              N/A
    Common Stock (par value $.001)     1,433,159 shares          $4.67(3)    $6,692,852.53(3)    $1,860.62


Shares Acquired Under Written
Compensation Agreement with
Sherman Tuan
    Common Stock (par value $.001)        56,875 shares       $12.9375(2)      $735,820.32(2)      $204.56

Options Granted Under Written
Compensation Agreement with
Warren J. Kaplan
    Options                                  421,923              N/A              N/A               N/A
    Common Stock (par value $.001)       421,923 shares          $0.40(3)      $168,769.20(3)       $46.92

Shares Acquired Under Written
Compensation Agreement with
Warren J. Kaplan
    Common Stock (par value $.001)        70,082 shares        $12.9375(2)     $906,685.88(2)      $252.06
</TABLE>


(1)  This Registration Statement shall also cover any additional shares of
     Common Stock which become issuable under the 1998 Stock Incentive Plan, the
     1998 Employee Stock Purchase Plan, the 1997 Stock Plan, the 1996 Stock
     Option Plan and the Shares Acquired under the Written Compensation
     Agreement with Sherman Tuan and the Shares and Options Granted Under
     Written Compensation Agreement with Warren J. Kaplan because of any stock
     dividend, stock split, recapitalization or other similar transaction
     effected without the receipt of consideration which results in an increase
     in the number of the outstanding shares of Common Stock of AboveNet
     Communications Inc.

(2)  Calculated only for purposes of this offering under Rule 457(h) of the
     Securities Act of 1933, as amended, on the basis of the average of the high
     and low prices per share of Common Stock of AboveNet Communications Inc. on
     the Nasdaq National Market on December 15, 1998.

(3)  Calculated only for purposes of this offering under Rule 457(h) of the
     Securities Act of 1933, as amended, on the basis of the weighted average
     exercise price of the outstanding options.


<PAGE>   3
                                EXPLANATORY NOTE


        Pursuant to General Instruction C of Form S-8, this Registration
Statement contains a prospectus meeting the requirements of Part I of Form S-3
relating to the reoffer by a certain individual of shares of common stock, par
value $0.001 per share, of AboveNet Communications, Inc. acquired pursuant to a
Written Agreement.


<PAGE>   4
                          ABOVENET COMMUNICATIONS, INC.

         FORM S-8 CROSS REFERENCE SHEET SHOWING LOCATION OF INFORMATION
                         REQUIRED BY PART I OF FORM S-3



<TABLE>
<CAPTION>
Form S-3 Item Number                             Location/Heading in Prospectus
--------------------                             ------------------------------
<S>                                              <C>
1.  Forepart of Registration Statement and       Cover page
    Outside Front Cover page of Prospectus
2.  Inside Front and Outside Back Cover          Available Information; Incorporation of
    Page of Prospectus                           Certain Information by Reference
3.  Summary Information, Risk Factors and        Risk Factors
    Ratio of Earnings to Fixed Charges
4.  Use of Proceeds                              Not applicable
5.  Determination of Offering Price              Not applicable
6.  Dilution                                     Not applicable
7.  Selling Security Holder                      Selling Security Holder
8.  Plan of Distribution                         Plan of Distribution
9.  Description of Securities to be              Not Applicable
    Registered
10. Interests of Named Experts and Counsel       Not Applicable
11. Material Changes                             Not Applicable
12. Incorporation of Certain Information         Documents Incorporated by Reference
13. Disclosure of Commission Position on         Indemnification
    Indemnification for Securities Act
    Liabilities
</TABLE>


<PAGE>   5
                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3. Incorporation of Documents by Reference

        AboveNet Communications Inc. ("AboveNet") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):

        (a)     AboveNet's prospectus filed with the SEC pursuant to Rule 424(b)
                under the Securities Act of 1933, as amended (the "1933 Act"),
                in connection with Registration Statement No. 333-63141 on Form
                S-1 filed with the SEC on September 10, 1998, the amendment
                filed on October 5, 1998 the amendment filed on October 21,
                1998, the amendment filed on November 6, 1998, the amendment
                filed on November 16, 1998, the amendment filed on December 7,
                1998 and the amendment filed on December 8, 1998, in which there
                are set forth audited financial statements for AboveNet's fiscal
                years ended June 30, 1997 and 1998;

        (b)     AboveNet's Registration Statement No. 0-25063 on Form 8-A filed
                with the SEC on November 16, 1998 under Section 12 of the
                Securities Exchange Act of 1934, as amended (the "1934 Act"),
                together with amendments thereto, in which there is described
                the terms, rights and provisions applicable to AboveNet's
                outstanding Common Stock.

        All reports and definitive proxy or information statements filed under
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall also be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents.

Item 4. Description of Securities

        Not Applicable.

Item 5. Interests of Named Experts and Counsel

        Not Applicable.

Item 6. Indemnification of Directors and Officers

        Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. AboveNet's
Bylaws provide for mandatory indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. AboveNet's Certificate of
Incorporation provides that, under Delaware law, its directors shall not be
liable for monetary damages for breach of their fiduciary duty as directors to
AboveNet and its stockholders. This provision in the Certificate of
Incorporation does not eliminate the fiduciary duty of the directors, and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to AboveNet for acts or omissions not in good faith
or involving intentional misconduct, for knowing violations of law, for actions
leading to improper personal benefit to the director and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. AboveNet has entered into Indemnification
Agreements with its officers and directors. The Indemnification Agreements
provide AboveNet's officers and directors with further indemnification to the
maximum extent permitted by the Delaware General Corporation Law.


                                      II-1
<PAGE>   6
Item 7. Exemption from Registration Claimed

        Not Applicable.

Item 8. Exhibits

Exhibit Number      Exhibit

        4           Instrument Defining Rights of Stockholders. Reference is
                    made to AboveNet's Registration Statement No. 0-25063 on
                    Form 8-A, which is incorporated herein by reference
                    under Item 3(d) of this Registration Statement.

        5           Opinion and consent of Gunderson Dettmer Stough
                    Villeneuve Franklin & Hachigian, LLP.

        23.1        Independent Auditors' Consent.

        23.2        Consent of Gunderson Dettmer Stough Villeneuve Franklin
                    & Hachigian, LLP is contained in Exhibit 5.

        24          Power of Attorney. Reference is made to page II-5 of
                    this Registration Statement.

        99.1        Written Compensation Agreement with Sherman Tuan.

        99.2        Written Compensation Agreement with Warren J. Kaplan.

Item 9. Undertakings

        A.      AboveNet hereby undertakes:

                (1)     to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement

                        (i)     to include any prospectus required by Section
                                10(a)(3) of the 1933 Act,

                        (ii)    to reflect in the prospectus any facts or events
                                arising after the effective date of this
                                Registration Statement (or the most recent
                                post-effective amendment thereof) which,
                                individually or in the aggregate, represent a
                                fundamental change in the information set forth
                                in this Registration Statement and

                        (iii)   to include any material information with respect
                                to the plan of distribution not previously
                                disclosed in this Registration Statement or any
                                material change to such information in this
                                Registration Statement; provided, however, that
                                clauses (1)(i) and (1)(ii) shall not apply if
                                the information required to be included in a
                                post-effective amendment by those paragraphs is
                                contained in periodic reports filed with or
                                furnished to the SEC by AboveNet under Section
                                13 or Section 15(d) of the 1934 Act that are
                                incorporated by reference in this Registration
                                Statement;

                (2)     that for the purpose of determining any liability under
the 1933 Act each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof and

                (3)     to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of AboveNet's 1998 Stock Incentive Plan, the 1998 Employee Stock
Purchase Plan, the 1997 Stock Plan, the 1996 Stock Option Plan, the Shares
Acquired under the Written Compensation Agreement with Sherman Tuan and the
Shares and Options Granted Under the Written Compensation Agreement with Warren
J. Kaplan.


                                      II-2
<PAGE>   7
        B.      AboveNet undertakes that, for purposes of determining any
liability under the 1933 Act, each filing of AboveNet's annual report under
Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

        C.      Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of
AboveNet under the indemnification provisions summarized in Item 6 or otherwise,
AboveNet has been advised that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the 1933 Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by AboveNet of expenses incurred or paid by
a director, officer or controlling person of AboveNet in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, AboveNet
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.


                                      II-3
<PAGE>   8
REOFFER PROSPECTUS

                                   SIGNATURES



        The Securities Act of 1933, as amended, requires that AboveNet certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has had this Registration Statement signed on its
behalf by the undersigned, who is duly authorized, in the City of San Jose,
State of California on this 18th day of December, 1998.


                                       ABOVENET COMMUNICATIONS INC.


                                       By: /s/  SHERMAN TUAN       
                                           -------------------------------------
                                           Chief Executive Officer



                                POWER OF ATTORNEY



KNOW ALL PERSONS BY THESE PRESENTS:

        That the undersigned officers and directors of AboveNet Communications
Inc., a Delaware corporation, do hereby constitute and appoint Sherman Tuan and
Stephen P. Belomy, and either of them, the lawful attorneys-in-fact and agents
with full power and authority to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, and either one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or either one of them, shall do or cause to
be done by virtue hereof. This Power of Attorney may be signed in several
counterparts.

        IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.

        Under the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                              Title                                           Date
---------                              -----                                           ----
<S>                                    <C>                                      <C>

/s/     SHERMAN TUAN                   Chairman of the Board,
----------------------------------        Chief Executive Officer and           December 18, 1998   
        Sherman Tuan                      Director                                            
                                          (Principal Executive Officer)                       
                                          


/s/     DAVID F. LARSON                Senior Vice President and Chief          December 18, 1998
----------------------------------        Financial Officer                
        David F. Larson                   (Principal Financial Officer)    
</TABLE>


<PAGE>   9
REOFFER PROSPECTUS



<TABLE>
<S>                                    <C>                                      <C>
/s/     KEVIN HOURIGAN                  Vice President of Finance and           December 18, 1998
----------------------------------        Controller (Chief Accounting 
        Kevin Hourigan                    Officer)


/s/     PETER C. CHEN, Ph.D.            Vice Chairman of the Board              December 18, 1998
----------------------------------        and Director
        Peter C. Chen, Ph.D.              


/s/     WARREN J. KAPLAN                President, Chief Operating Officer      December 18, 1998
----------------------------------        and Director
        Warren J. Kaplan                  


/s/     ROBERT A. BURGELMAN             Director                                December 18, 1998
----------------------------------
        Robert A. Burgelman


/s/     FRANK R. KLINE                  Director                                December 18, 1998
----------------------------------
        Frank R. Kline


/s/     JAMES SHA                       Director                                December 18, 1998
----------------------------------
        James Sha


/s/     TOM SHAO, Ph.D.                 Director                                December 18, 1998
----------------------------------
        Tom Shao, Ph.D.


/s/     KIMBALL W. SMALL                Director                                December 18, 1998
----------------------------------
        Kimball W. Small


/s/     FRED A. VIERRA                  Director                                December 18, 1998
----------------------------------
        Fred A. Vierra
</TABLE>


<PAGE>   10
REOFFER PROSPECTUS


                                 126,975 Shares
                          AboveNet Communications Inc.
                                  Common Stock

        This Reoffer Prospectus relates to 126,975 shares of the Common Stock,
par value $.001 (the "Common Stock"), of AboveNet Communications Inc. (the
"Company"), which may be offered from time to time by the Registered
Stockholders named herein (the "Registered Stockholders"). It is anticipated
that the Registered Stockholders will offer shares for sale at prevailing prices
on the Nasdaq National Market System on the date of sale. The Company will
receive no part of the proceeds of sale made hereunder. All expenses of
registration incurred in connection with this offering are being borne by the
Company, but all selling and other expenses incurred by the Registered
Stockholders will be borne by such Registered Stockholders.

        The Company's Common Stock is traded on the Nasdaq National Market 
System under the symbol ABOV. On December 15, 1998, the average of the high and 
low selling prices of the Common Stock was $12.9375 per share.

        The Registered Stockholders and any broker executing selling orders on
behalf of the Registered Stockholders may be deemed to be an "underwriter"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), in which event commissions received by such broker may be deemed to be
underwriting commissions under the Securities Act.

          THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE
       CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
                                   INVESTMENT.
                     SEE "RISK FACTORS" BEGINNING ON PAGE 5.

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
         AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
           ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
                     TO THE CONTRARY IS A CRIMINAL OFFENSE.

        No person is authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any Registered Stockholders. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.

        The date of this Prospectus is December 15, 1998.


<PAGE>   11
                              AVAILABLE INFORMATION

        The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices at 219 South Dearborn Street, Chicago,
IL 60604; 26 Federal Plaza, New York, NY 10007; and 5757 Wilshire Boulevard, Los
Angeles, CA 90036, at prescribed rates. The Common Stock of the Company is
quoted on the Nasdaq National Market System. Reports, proxy statements,
informational statements and other information concerning the Company can be
inspected at the offices of the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.

        The Company intends to furnish its stockholders with annual reports
containing additional financial statements and a report thereon by independent
certified public accountants.

        A copy of any document incorporated by reference in the Registration
Statement (not including exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by reference into
the information that the Registration Statement incorporates) of which this
Reoffer Prospectus forms a part but which is not delivered with this Reoffer
Prospectus will be provided by the Company without charge to any person
(including any beneficial owner) to whom this Reoffer Prospectus has been
delivered upon the oral or written request of such person. Such requests should
be directed to the Stock Plan Administrator, AboveNet Communications Inc., 50 W.
San Fernando Street, Suite #1010, San Jose, California 95113. The Company's
telephone number is (408) 367-6666.



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                          Page
<S>                                                                                       <C>
THE COMPANY..................................................................................3

RISK FACTORS.................................................................................5

REGISTERED STOCKHOLDERS.....................................................................16

PLAN OF DISTRIBUTION........................................................................17

DOCUMENTS INCORPORATED BY REFERENCE.........................................................18

INDEMNIFICATION.............................................................................18
</TABLE>


                                       2
<PAGE>   12
       
                                  THE COMPANY
 
     AboveNet Communications Inc. ("AboveNet" or the "Company") is a leading
provider of high performance, managed co-location and Internet connectivity
solutions for electronic commerce and other mission-critical Internet
operations. AboveNet has developed a network architecture based upon two
strategically located, fault-tolerant facilities that combine content
co-location services with direct ISP access to create Internet Service Exchanges
("ISXs"). As of September 30, 1998, the Company had 171 public and private data
exchange connections, known as peering arrangements, including relationships
with top-tier network providers. The Company's network architecture and
extensive peering relationships are designed to reduce the number of network
connections or "hops" for data travelling across the Internet. Furthermore, the
convergence of content providers and ISPs at AboveNet's ISXs enables these ISPs
to provide their users with "one hop" connectivity, through AboveNet's local
area network, to the co-located content site. As of September 30, 1998, the
Company had 316 customers including a wide range of Internet content providers,
Web hosting companies and ISPs.
 
     The Internet has experienced tremendous growth and is emerging as a global
medium for communications and commerce. Internet-based businesses and other
enterprises need non-stop, non-congested, fault-tolerant and scalable Internet
operations to allow them to perform mission-critical digital communication and
electronic commerce transactions globally over the Internet. However, many
businesses that are seeking to establish these sophisticated Internet operations
lack the resources and expertise to cost-effectively develop, maintain and
enhance the necessary facilities and network systems. As a result, many
enterprises are seeking outsourcing arrangements to enhance Web site reliability
and performance, provide continuous operation of their Internet solutions and
reduce related operating expenses. Forrester Research, Inc.(1) estimates that by
2002, approximately 40% of complex Web sites will be outsourced and that
Internet hosting revenues for complex sites will increase from approximately
$200 million in 1997 to approximately $8.0 billion by 2002.
 
     AboveNet's solutions are designed to be highly scalable and flexible to
meet the needs of its customers as their Internet operations expand. AboveNet
charges its customers based on space and bandwidth utilization, providing
customers a flexible, cost-effective method to increase their Internet
operations. The Company's services are designed to enhance performance through
redundant and high speed network design and 24x7 monitoring, notification and
diagnosis. AboveNet's proprietary ASAP software monitors all of the Company's
direct and indirect network connections for latency and packet loss, allowing
its network engineers to enhance performance by dynamically rerouting traffic to
avoid congested points. The Company also provides its customers with
sophisticated monitoring, reporting and management tools that can be remotely
accessed by the customer to control its Internet operations. By providing a
means to reduce the number of "hops" in the transmission of data, the Company
believes that its network design can provide significant benefits to ISPs as
they seek to gain fast, reliable access to content.
 
     The Company's objective is to become the leading global Internet Service
Exchange for business enterprises and ISPs that require high-bandwidth,
mission-critical Internet operations. To achieve this objective, the Company
intends to: (i) increase awareness of the AboveNet name on a global basis;

                                       3
<PAGE>   13
---------------
 
    (1) Forrester Research, Inc. estimates are based upon interviews with more
than 41,000 households as part of its "Technographics '98" survey. In addition,
the report stated that 81 ISPs were asked to provide detailed unit sales, prices
and projections for 1996 through 1998. The ISP data was extrapolated to provide
a total current market size and direction. Finally, 22 vendors of hosting
services and related organizations were contacted. There can be no assurances
that actual results will not differ materially from those estimated.

 
(ii) expand its customer base through increased sales and marketing efforts;
(iii) expand its global ISX network by connecting centralized facilities in key
domestic and international locations; (iv) leverage its ISX model to increase
its customer base and generate recurring revenues; and (v) address the emerging
requirements of Internet technologies such as audio and video streaming and
voice over IP.
 
     The Company's customers include CNET Download.com, Dacom America,
Electronic Arts Inc., Got.Net, Imagine Radio, IntelliChoice, Inc., iXL, Inc.,
Netscape Communications Corporation, RealNetworks, Inc. and The Web Zone, Inc.
The Company intends to expand its customer base by substantially expanding its
sales organization, as well as establishing and expanding relationships with
potential channel partners including hardware vendors, value added resellers,
system integrators and Web hosting companies, to leverage their sales
organizations. The Company also plans to invest in building the AboveNet brand
through an integrated marketing plan, including traditional and online
advertising in business and trade publications, trade show participation, direct
mail and public relations campaigns.
 
     The Company was incorporated in California in March 1996 and reincorporated
in Delaware in November 1998. The Company's principal executive offices are
located at 50 W. San Fernando Street, Suite #1010, San Jose, California 95113,
and its telephone number is (408) 367-6666.
 
     EtherValve is a registered trademark of the Company. Cabriolet and MRTG are
trademarks of the Company. The Company has applied for federal trademark
registration for the following names: AboveNet APS, ASAP, As-Ur-Here, Internet
Service Exchange and ISX. All other trademarks, servicemarks or tradenames
referred to in this Prospectus are the property of their respective owners.
 
        AboveNet's executive offices are located at 50 W. San Fernando Street,
Suite #1010, San Jose, California 95113. The Company's telephone number is (408)
367-6666.

                                       4
<PAGE>   14
 
                                  RISK FACTORS
 
     An investment in the shares of Common Stock offered hereby is speculative
in nature and involves a high degree of risk. In addition to the other
information contained in this Prospectus, the following factors should be
considered carefully in evaluating the Company and its business before
purchasing the shares of Common Stock offered hereby. This Prospectus contains
certain forward-looking statements based on current expectations that involve
risks and uncertainties. Any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements. For example,
the words "believes," "anticipates," "plans," "expects," "intends" and similar
expressions are intended to identify forward-looking statements. The Company's
actual results and the timing of certain events may differ significantly from
the results discussed in the forward-looking statements. Factors that might
cause such a discrepancy include, but are not limited to, those discussed below
and elsewhere in this Prospectus.
 
     Limited Operating History; History of Losses; Expected Continued
Losses. The Company was incorporated in March 1996 and has experienced operating
losses in each quarterly and annual period since inception. The Company
experienced net losses of $1.8 million, $5.4 million and $3.4 million in fiscal
years 1997 and 1998, and for the three months ended September 30, 1998,
respectively, and, as of September 30, 1998, had an accumulated deficit of
approximately $10.7 million. The Company began offering its co-location and
Internet connectivity services to content providers in July 1996, and introduced
its co-location and Internet connectivity services to ISPs in August 1997. The
Company began operating its second ISX facility in Vienna, Virginia in July
1998. The revenue and income potential of the Company's business and market is
unproven, and the Company's limited operating history makes an evaluation of the
Company and its prospects difficult. The Company and its prospects must be
considered in light of the risks, expenses and difficulties encountered by
companies in the new and rapidly evolving market for co-location and Internet
connectivity services. The Company expects to continue making significant
investments to (i) substantially increase its sales and marketing activities and
(ii) establish a second ISX facility in San Jose, California of approximately
110,000 square feet, including approximately 50,000 square feet of co-location
space. The Company believes that it will continue to experience net losses on a
quarterly and annual basis for the foreseeable future, and such losses are
expected to increase significantly from current levels. To achieve or sustain
profitability, among other things, the Company must substantially grow its
customer base, including maintaining existing customer relationships, expand
domestically and internationally, provide scalable, reliable and cost-effective
services, continue to grow its infrastructure to accommodate expanded and new
facilities, additional customers and increased bandwidth use of its network,
expand its channels of distribution, effectively establish its brand name,
retain and motivate qualified personnel and continue to respond to competitive
developments. Failure of the Company's services to achieve widespread market
acceptance would have a material adverse effect on the Company's business,
results of operations and financial condition. Although the Company has
experienced significant growth in revenues in recent periods, the Company does
not believe that this growth rate is necessarily indicative of future operating
results, and there can be no assurance that the Company will ever achieve
profitability on a quarterly or an annual basis or, if achieved, will sustain
profitability.
 
     Need to Grow and Retain Customer Base; Lengthy Sales Cycle. The Company's
success is substantially dependent on the continued growth of its customer base
and the retention of its customers. The Company's ability to attract new
customers will depend on a variety of factors, including the willingness of
businesses to outsource their mission-critical Internet operations, the
reliability and cost-effectiveness of the Company's services and the Company's
ability to effectively market such services. A majority of the Company's
customer contracts are cancelable on 30 days' notice. In the past, the Company
has lost customers to other service providers for various reasons, including as
a result of lower prices and other incentives offered by competitors and not
matched by the Company. Accordingly, there can be no assurance that the
Company's customers will maintain or renew their commitments to use the
Company's services. The Company intends to develop alternative distribution and
lead generation relationships with potential channel partners including hardware
providers, system integrators, value added resellers and Web hosting companies.
Any failure by the Company to develop these relationships could materially and
adversely impact the ability of the Company to generate increased revenues,
which would have a material adverse effect on the Company's business, results of
 
                                        5
<PAGE>   15
 
operations and financial condition. In addition, the Company typically
experiences a lengthy sales cycle for its services, resulting, in part, from the
importance to customers of securing Internet connectivity for mission-critical
operations and the need to educate certain customers regarding the benefits of
co-location and Internet connectivity services. Changes in the rate of growth in
the Company's customer base, customer renewal rates and the sales cycle for the
Company's services, have caused, and are expected in the future to cause,
significant fluctuations in the Company's results of operations on a quarterly
and an annual basis. In addition, the Company intends to significantly increase
its sales and marketing expenditures. Due to the typically lengthy sales cycle
for the Company's services, such expenses will occur prior to customer
commitments for the Company's services. There can be no assurance that the
increase in the Company's sales and marketing efforts will result in increased
sales of the Company's services.
 
     Potential Fluctuations in Results of Operations. The Company has
experienced significant fluctuations in its results of operations on a quarterly
and annual basis. The Company expects to continue to experience significant
fluctuations in its future quarterly and annual results of operations due to a
variety of factors, many of which are outside the Company's control, including:
demand for and market acceptance of the Company's services; capacity utilization
of its ISX facilities; fluctuations in data communications and
telecommunications costs; reliable continuity of service and network
availability; customer retention; the timing and success of marketing efforts by
the Company; the timing and magnitude of capital expenditures, including costs
relating to the expansion of operations; the timely expansion of existing
facilities and completion of new facilities; the ability to increase bandwidth
as necessary; fluctuations in bandwidth used by customers; the timing and
magnitude of expenditures for sales and marketing; introductions of new services
or enhancements by the Company and its competitors; the timing of customer
installations and related payments; the ability to maintain or increase peering
relationships; provisions for customer discounts and credits; the introduction
by third parties of new Internet services; increased competition in the
Company's markets; growth of Internet use and establishment of Internet
operations by mainstream enterprises; changes in the pricing policies of the
Company and its competitors; changes in regulatory laws and policies; economic
conditions specific to the Internet industry; and general economic factors. In
addition, a relatively large portion of the Company's expenses are fixed in the
short-term, particularly with respect to data communications and
telecommunications costs, depreciation, real estate, interest and personnel, and
therefore the Company's future results of operations will be particularly
sensitive to fluctuations in revenues. In addition, the Company expects to incur
compensation costs related to certain option grants and warrants, including a
significant charge in the quarter that this offering is consummated.
Furthermore, although the Company has not encountered significant difficulties
in collecting its accounts receivable in the past, many of the Company's
customers are in an emerging stage, and there can be no assurance that the
Company will be able to collect receivables on a timely basis. The Company also
expects that its sales may be affected by seasonality trends with decreased
revenues during the summer months. Due to all of the foregoing factors, the
Company believes that period-to-period comparisons of its results of operations
are not necessarily meaningful and should not be relied upon as indications of
future performance. Furthermore, as a result of the foregoing and other factors,
the Company's results of operations in future periods may fall below the
expectations of securities analysts and investors. In such event, the trading
price of the Company's Common Stock will likely be materially and adversely
affected.
 
     Risks Associated with Recent and Planned Business Expansion. The Company
recently opened its second ISX facility in Vienna, Virginia. The Company is also
planning to develop a second ISX facility in San Jose, California of
approximately 110,000 square feet, including approximately 50,000 square feet of
co-location space. The new facility is targeted to open by the fall of 1999. The
Company intends to initially complete the build-out of approximately 13,000
square feet of co-location space and to complete the build-out of additional
co-location space incrementally over time based on customer demand. The Company
intends to use a significant portion of the net proceeds of this offering to
construct the new San Jose ISX facility. In addition, any build-out of
incremental co-location space at the new facility may require the Company to
obtain additional debt or equity financing. The Company will need to accomplish
a number of objectives in order to successfully complete the development of the
planned ISX facility, on a timely basis or at all, including obtaining necessary
permits and approvals, passing required inspections, and hiring necessary
contractors,
                                        6
<PAGE>   16
 
builders, electricians, architects and designers. In addition, the development
of this new facility could place a significant strain on the Company's
management resources and could result in the diversion of management attention
from the day-to-day operation of the Company's business. The successful
development of the facility will require careful management of various risks
associated with significant construction projects, including construction delay,
cost estimation errors or overruns, equipment and material delays or shortages,
inability to obtain necessary permits on a timely basis and other factors, many
of which are beyond the Company's control. There can be no assurance with
respect to the cost, timing or extent of any expansion or that the Company will
be successful in expanding its operations, or developing the ISX facility
planned for San Jose, California, as well as any new ISX facilities that the
Company may want to establish in the future, on a timely basis, or at all. The
Company's inability to establish its planned facility or to effectively manage
its expansion would have a material adverse effect upon the Company's business,
results of operations and financial condition. Furthermore, the Vienna, Virginia
ISX facility and, if completed, the new San Jose ISX facility, will result in
substantial new fixed and operating expenses, including expenses associated with
hiring, training and managing new employees, purchasing new equipment,
implementing power and redundancy systems, implementing multiple data
communication and telecommunication connections, leasing additional real estate
and depreciation. In addition, the Company will need to continue to implement
and improve its operational and financial systems. If revenue levels do not
increase sufficiently to offset these new expenses, the Company's operating
results will be materially adversely impacted in future periods. There can be no
assurance that the Company will accurately anticipate the customer demand for
new facilities or that the Company will attract a sufficient number of
customers.
 
     The Company also intends to make strategic minority investments in joint
ventures and foreign companies that develop ISX facilities in Europe and Asia
and to license its trademarks and technology to such entities. If the Company
makes such investments, the Company will be dependent on these joint ventures
and foreign companies to establish and operate ISX facilities. The ability of
these joint ventures and foreign companies to successfully establish and operate
ISX facilities is subject to a number of risks over which the Company will have
little or no control, as a result of its anticipated minority ownership in such
entities. There can be no assurance that these entities will be able to obtain
the necessary data communications and telecommunications infrastructure in a
cost-effective manner or compete effectively in international markets. In
addition, there can be no assurance that any of these investments, if made, will
result in the establishment of ISX facilities, or that such investment
relationships will not be disrupted. Furthermore, to the extent that such
entities use the AboveNet brand name and do not provide the same level of
performance and service as the Company, their operations could have a material
adverse effect on the Company's reputation and brand equity. Furthermore,
certain foreign governments have enforced laws and regulations related to
content distributed over the Internet that are more restrictive than those
currently in place in the United States. There can be no assurance that one or
more of these factors will not have a material adverse effect on the Company's
global ISX strategy, business, results of operations and financial condition.
 
     Intense Competition. The market served by the Company is intensely
competitive. There are few substantial barriers to entering the co-location
service business, and the Company expects that it will face additional
competition from existing competitors and new market entrants in the future. The
Company believes that participants in this market must grow rapidly and achieve
a significant presence in the market in order to compete effectively. There can
be no assurance that the Company will have the resources or expertise to compete
successfully in the future. In addition, many of the Company's current and
potential competitors have substantially greater financial, technical and
marketing resources, larger customer bases, longer operating histories, greater
name recognition and more established relationships in the industry than the
Company. As a result, certain of these competitors may be able to develop and
expand their network infrastructures and service offerings more quickly, adapt
to new or emerging technologies and changes in customer requirements more
quickly, take advantage of acquisitions and other opportunities more readily,
devote greater resources to the marketing and sale of their services and adopt
more aggressive pricing and incentive policies than can the Company. In an
effort to gain market share, certain of the Company's competitors have offered
co-location services similar to those of the Company at lower prices than those
of the Company or with incentives not
 
                                        7
<PAGE>   17
 
matched by the Company, including free start-up and domain name registration,
periods of free service and low-priced Internet access. As a result of these
policies, the Company may encounter increasing pricing pressure which could
result in loss of customers and have a material adverse effect on its business,
results of operations and financial condition.
 
     In addition, certain of the Company's competitors have entered and will
likely continue to enter into joint ventures, consortiums or consolidations to
provide additional services competitive with those provided by the Company. As a
result, such competitors may be able to provide customers with additional
benefits in connection with their co-location and network management solutions,
including reduced communications costs, which could reduce the overall costs of
their services relative to the Company's services. There can be no assurance
that the Company will be able to offset the effects of any such price
reductions. The Company believes that companies seeking co-location and Internet
connectivity providers for their mission-critical Internet operations may use
more than one company to provide this service. As a result, these customers
would be able to more easily shift the amount of service and bandwidth usage
from one provider to another. The Company may also face competition from its
suppliers.
 
     Management of Growth; Dependence on Key Personnel. The Company has recently
experienced a period of rapid growth with respect to the expansion of its ISX
facilities and its customer base. The Company's ability to manage effectively
its recent growth and any future growth will require it to continue to expand
its operating and financial procedures and controls, to replace or upgrade its
operational, financial and management information systems and to attract, train,
motivate, manage and retain key employees. The Company is currently upgrading
its financial and management information systems. There can be no assurance that
the Company will be able to implement such new systems successfully or on a
timely basis. The Company also is dependent upon its ability to increase
substantially the size of its sales and marketing organization. The market for
highly qualified sales and marketing personnel is very competitive. There can be
no assurance that the Company will be successful in meeting its hiring goals or
that any new employees will be successful in expanding the Company's customer
base. The Company's growth has placed, and if it continues, will place, a
significant strain on the Company's financial, management, operational and other
resources. If the Company's management is unable to effectively manage any
further growth that may occur, the Company's business, results of operations and
financial condition would be materially adversely affected. 
 
     The Company has recently hired many key employees and officers, including
its President and Chief Operating Officer, its Senior Vice President of Sales
and Marketing, its Vice President of International-Europe, its Vice President of
Sales, its Vice President of Construction and Real Estate and most recently, its
Chief Financial Officer. As a result, the Company's management team has worked
together for only a brief time. The Company's ability to effectively execute its
strategies will depend in part upon its ability to integrate these and future
managers into its operations. The Company also has plans to hire additional
executive management personnel, including a Vice President of Marketing. If the
Company's executives are unable to manage growth effectively, the Company's
business, results of operations and financial condition could be materially
adversely affected. The Company's success also depends in significant part upon
the continued services of its senior management and key technical and sales
personnel, including the Company's Chief Executive Officer, Sherman Tuan,
President and Chief Operating Officer, Warren J. Kaplan, Chief Technical
Officer, David Rand, and Senior Vice President of Sales and Marketing, David
Dembitz. The Company maintains a key man insurance policy in the amount of
approximately $1.1 million on the life of Mr. Tuan, but does not maintain such
insurance with respect to any other executive officers. Any officer or employee
of the Company can terminate his or her relationship with the Company at any
time. The loss of the services of one or more of the Company's key employees or
the Company's failure to attract additional qualified personnel could have a
material adverse effect on the Company's business, results of operations and
financial condition. 
 
     Risk of System Failure. The Company's operations are dependent upon its
ability to prevent system interruption and protect its network infrastructure
and customers' equipment against damage from human error, fire, earthquakes,
floods, power loss, telecommunications failures, sabotage, intentional acts of
vandalism
                                        8
<PAGE>   18
 
and similar events. The Company's existing and planned ISX facilities in San
Jose, California are in an area that is subject to earthquakes and, as a result,
are subject to greater risk of system interruption. Despite precautions taken,
and planned to be taken, by the Company the occurrence of a natural disaster or
other unanticipated problems such as human interference or mistake, unannounced
or unexpected changes in transmission protocols or other technology, could
result in interruptions in the services provided by the Company or significant
damage to customer equipment. In addition, failure of any of the Company's data
communication and telecommunication providers, such as MCI WorldCom, Sprint,
Pacific Bell, Teleport Communications Group, a subsidiary of AT&T, and WinStar
Communications, Inc., to provide the data communication and/or telecommunication
capacity required by the Company, whether as a result of human error, a natural
disaster or other operational disruption, could result in interruptions in the
Company's services. Any damage to or failure of the systems of the Company or
its service providers could result in reductions in, or terminations of,
services supplied to the Company's customers, which could have a material
adverse effect on the Company's business, results of operations and financial
condition. In addition, the Company's reputation could be materially adversely
affected. The Company may be subject to legal claims by its customers for
disruption of service or damage to customer equipment. While the Company's
customer contracts generally purport to eliminate the Company's liability for
consequential or punitive damages or for damage to customer equipment not caused
by the Company's gross negligence or willful acts, there can be no assurance
that the Company would not be held liable for such damages. 
 
     Risks Associated with Emerging Market for Network Management Services;
Uncertainty of Acceptance of Services. The market for co-location and Internet
connectivity services has only recently begun to develop, is evolving rapidly
and likely will be characterized by an increasing number of market entrants.
There is significant uncertainty regarding whether this market ultimately will
prove to be viable or, if it becomes viable, that it will grow. The Company's
future growth, if any, will be dependent on the growth of the Internet as a
global communication and commerce medium, the growth of mission-critical
Internet operations, the willingness of enterprises to co-locate and outsource
Internet connectivity for their mission-critical Internet operations and the
Company's ability to successfully and cost-effectively market its services to a
sufficiently large number of customers. There can be no assurance that the
market for the Company's services will develop, that the Company's services will
be adopted or that businesses, organizations or consumers will significantly
increase use of the Internet for commerce and communication. If this market
fails to develop, or develops more slowly than expected, or if the Company's
services do not achieve widespread market acceptance, the Company's business,
results of operations and financial condition would be materially and adversely
affected. In addition, in order to be successful in this emerging market, the
Company must be able to differentiate itself from its competition through its
service offerings and brand name recognition. There can be no assurance that the
Company will be successful in differentiating itself or achieving widespread
market acceptance of its services, or that it will not experience difficulties
that could delay or prevent the successful development, introduction or
marketing of these services. In addition, there can be no assurance that the
Company's business model of establishing centralized ISX facilities will be
widely adopted over the model established by other outsource providers who have
developed and are continuing to develop numerous geographically disbursed
facilities. In addition, if the Company incurs increased costs or is unable, for
technical or other reasons, to develop and introduce new services or
enhancements of existing services in a timely manner, or if these or other new
services do not achieve widespread market acceptance, the Company's business,
results of operations and financial condition would be materially adversely
affected.
 
     Risks Associated with Network Scalability. The Company must continue to
expand and adapt its network infrastructure as the number of users and the
amount of information they wish to transport increase and to meet changing
customer requirements. Due to the limited deployment of the Company's services
to date, the ability of the Company's network to connect and manage a
substantially larger number of customers at high transmission speeds is as yet
unknown, and the Company faces risks related to the network's ability to be
scaled up to significantly greater customer levels while maintaining a high
level of performance. To the extent customers' usage of bandwidth increases, the
Company will need to make additional investments in its infrastructure to
maintain adequate downstream data transmission speeds, the availability of which
may be limited or the cost of which may be significant. There can be no
assurance that additional network capacity
 
                                       9
<PAGE>   19
 
will be available from third-party suppliers when it is needed by the Company.
As a result, there can be no assurance that the Company's network will be able
to achieve or maintain a sufficiently high data transmission capacity. The
Company's failure to achieve or maintain high data transmission capacity could
significantly reduce consumer demand for its services and have a material
adverse effect on its business, results of operations and financial condition.
In addition, as the Company upgrades its telecommunications infrastructure to
increase bandwidth available to its customers, it may encounter equipment or
software incompatibility which may cause delays in implementation. There can be
no assurance that the Company will be able to expand or adapt its
telecommunications infrastructure to meet additional demand or its customers'
changing requirements, on a timely basis and at a commercially reasonable cost,
or at all. 
 
     Need to Maintain and Increase Peering Relationships. The Internet is
comprised of several network providers who operate their own networks and
interconnect their networks at various public and private peering points,
through "peering arrangements" with one another. The Company's establishment and
maintenance of peering relationships is necessary in order to effectively
exchange traffic with ISPs without having to pay the higher costs of transit
services and in order to maintain high network performance levels. These
arrangements are not subject to regulation and are subject to revision in terms,
conditions or costs over time. There is no assurance that ISPs will maintain
peering relationships with the Company. In addition, increasing requirements or
costs may be imposed on the Company in order to maintain peering relationships
with ISPs, particularly national ISPs. Failure to maintain peering relationships
would adversely affect the level of connectivity available to the Company's
customers or cause the Company to incur additional operating expenditures by
paying for transit, either of which could have a material adverse effect on the
Company's business, results of operations and financial condition. In addition,
if these network providers were to increase the pricing associated with
utilizing their networks, the Company may be required to identify alternative
methods through which it can distribute its customers' content. If the Company
were unable to access on a cost-effective basis alternative networks to
distribute its customers' content or pass through any additional costs of
utilizing these networks to its customers, the Company's business, results of
operations and financial condition would be materially adversely affected.
 
     Dependence upon Third Party Suppliers. The Company's success will depend
upon third party network infrastructure providers, including the capacity leased
from its telecommunications network suppliers. In particular, the Company is
dependent on Sprint, MCI WorldCom and certain other data communication and
telecommunication providers for its backbone capacity and is therefore dependent
on such companies to maintain the operational integrity of its backbone. In
addition, any significant increase in data communication or telecommunication
costs could have a material adverse effect on the Company's business, results of
operations and financial condition. MCI WorldCom is a current competitor and the
Company's other data communications providers are potential competitors of the
Company. Furthermore, the Company relies on a number of public and private
peering interconnections to deliver its services. If the carriers that operate
the Internet exchange points were to discontinue their support of the peering
points and no alternative providers emerged, or such alternative providers
increased the cost of utilizing the Internet exchange points, the distribution
of content through the Internet exchange points, including content distributed
by the Company, would be significantly constrained. Furthermore, as traffic
through the Internet exchange points increases, if commensurate increases in
bandwidth are not added, the Company's ability to distribute content rapidly and
reliably through these networks will be materially adversely affected.
 
     The Company relies on other companies to supply certain key components of
its network infrastructure, including networking equipment which, in the
quantities and quality demanded by the Company, are available only from limited
sources. Currently, the Company orders all of its routers from Cisco Systems,
Inc. Although the Company believes that it could procure alternative sources to
supply routers in the event routers from Cisco Systems, Inc. were unavailable,
the Company would need to train its personnel in the use of alternative routers,
which could cause delay or interruption in its services. 
 
     Risks Associated with Potential Future Acquisitions. The Company may in the
future pursue acquisitions of technologies or businesses. Future acquisitions by
the Company may result in the use of significant amounts of cash, potentially
dilutive issuances of equity securities, incurrence of debt, or amortization
expenses related to goodwill and other intangible assets, any of which could
materially adversely affect the
                                       10
<PAGE>   20
 
Company's business, results of operations or financial condition. In addition,
acquisitions involve numerous risks, including difficulties in the assimilation
of the operations, technologies, products and personnel of the acquired company,
the diversion of management's attention from other business concerns, risks of
entering markets in which the Company has no or limited direct prior experience,
and the potential loss of key employees of the acquired company. In the event
that any such acquisitions occur, there can be no assurance that the Company's
business, results of operations and financial condition would not be materially
adversely affected.
 
     Dependence on Growth of Internet Use and Internet Infrastructure
Development. The increased use of the Internet for retrieving, sharing and
transferring information among businesses, consumers, suppliers and partners has
only recently begun to develop, and the Company's success will depend in large
part on continued growth in the use of the Internet, which in turn will depend
on a variety of factors including security, reliability, cost, ease of access,
quality of service and necessary increases in bandwidth availability. The
adoption of the Internet for information retrieval and exchange, commerce and
communications, particularly by those enterprises that have historically relied
upon alternative means of commerce and communications, generally will require
the acceptance of a new medium of conducting business and exchanging
information. Demand for and market acceptance of the Internet are subject to a
high level of uncertainty and are dependent on a number of factors, including
growth in consumer access to and acceptance of new interactive technologies, the
development of technologies that facilitate interactive communication between
organizations and targeted audiences and increases in user bandwidth. If the
Internet as a commercial or business medium fails to develop or develops more
slowly than expected, the Company's business, results of operations and
financial condition could be materially adversely affected. The recent growth in
the use of the Internet has caused frequent periods of performance degradation,
requiring the upgrade of routers and switches, telecommunications links and
other components forming the infrastructure of the Internet by ISPs and other
organizations with links to the Internet. Any perceived degradation in the
performance of the Internet as a whole could undermine the benefits of the
Company's services. Potentially increased performance provided by the services
of the Company and others is ultimately limited by and reliant upon the speed
and reliability of the networks operated by third parties. Consequently, the
emergence and growth of the market for the Company's services is dependent on
improvements being made to the entire Internet infrastructure to alleviate
overloading and congestion.
 
     Rapid Technological Change; Evolving Industry Standards. The Company's
future success will depend, in part, on its ability to offer services that
address the increasingly sophisticated and varied needs of its current and
prospective customers and to respond to technological advances and emerging
industry standards and practices on a timely and cost-effective basis.
Mission-critical Internet operations are complex and are characterized by
rapidly changing and unproven technology, evolving industry standards, changes
in customer needs, emerging competition and frequent new service introductions.
There can be no assurance that future advances in technology will be beneficial
to, or compatible with, the Company's business, that the Company will be able to
incorporate such advances on a cost-effective or timely basis into its business
or that such advances will not make the Company's services unnecessary or less
cost-effective than using the new technology. Moreover, technological advances
may have the effect of encouraging certain of the Company's current or future
customers to rely on in-house personnel and equipment to furnish the services
currently provided by the Company. In addition, keeping pace with technological
advances in the Company's industry may require substantial expenditures and lead
time. Although the Company currently intends to support emerging standards,
there can be no assurance that industry standards will be established or, that
if they become established, the Company will be able to conform to these new
standards in a timely fashion and maintain a competitive position in the market.
The failure of the Company to conform to prevailing standards, or the failure of
a common standard to emerge, could have a material adverse effect on the
Company's business, results of operations and financial condition. In addition,
there can be no assurance that products, services or technologies developed by
others will not render the Company's services uncompetitive, unnecessary or
obsolete.
 
     Security Risks. Customer operations at the Company's facilities have in the
past experienced, and may in the future experience, delays or interruptions in
service as a result of the accidental or intentional actions of
 
                                       11
<PAGE>   21
 
Internet users, current and former employees or others. Furthermore, such
inappropriate access to the network by third parties could also potentially
jeopardize the security of confidential information, such as credit card and
bank account numbers, stored in the computer systems of the Company and its
customers, which could result in liability to the Company and the loss of
existing customers or the deterrence of potential customers. Although the
Company implements security procedures and systems, such procedures and systems
have been circumvented in the past, and there can be no assurance that
unauthorized access, accidental or intentional actions and other disruptions
will not occur in the future. The Company was recently sued by a customer
alleging that the Company negligently allowed the customer's consultant access
to the customer's servers located at the Company's San Jose facility. The costs
required to minimize security problems could be prohibitively expensive and the
efforts to address such problems could result in interruptions, delays or
cessation of service to the Company's customers, which could have a material
adverse effect on the Company's business, results of operations and financial
condition. Concerns over the security of Internet transactions and the privacy
of users may also inhibit the growth of the Internet, especially as a means of
conducting commercial transactions.
 
     Government Regulations and Legal Uncertainties. There is currently only a
small body of laws and regulations directly applicable to access to or commerce
on the Internet. However, due to the increasing popularity and use of the
Internet, it is possible that a number of laws and regulations may be adopted at
the international, federal, state and local levels with respect to the Internet.
A number of laws and regulations have already been proposed or are currently
being considered by federal, state and foreign legislatures. The nature of any
new laws and regulations and the manner in which existing and new laws and
regulations may be interpreted and enforced cannot be fully determined. The
adoption of any future laws or regulations might decrease the growth of the
Internet, decrease demand for the services of the Company, impose taxes or other
costly technical requirements or otherwise increase the cost of doing business
or in some other manner have a material adverse effect on the Company or its
customers, each of which could have a material adverse effect on the Company's
business, results of operations and financial condition. In addition,
applicability to the Internet of existing laws governing issues such as property
ownership, copyrights and other intellectual property issues, taxation, libel,
obscenity and personal privacy is uncertain. In addition, as the Company's
services are available over the Internet in multiple states and foreign
countries, and as the Company facilitates sales by its customers to end users
located in such states and foreign countries, such jurisdictions may claim that
the Company is required to qualify to do business as a foreign corporation in
each such state or foreign country. Any such new legislation or regulation, or
the application of laws or regulations from jurisdictions whose laws may not
currently apply to the Company's business, could have a material adverse effect
on the Company's business, results of operations and financial condition.
 
     Risks Associated with Information Disseminated through the Company's
Network. The law relating to the liability of online services companies and
Internet access providers for information carried on or disseminated through
their networks is currently unsettled. It is possible that claims could be made
against online services companies, co-location companies and Internet access
providers under both United States and foreign law for defamation, negligence,
copyright or trademark infringement, or other theories based on the nature and
content of the materials disseminated through their networks. The Company has in
the past received, and may in the future receive, letters from recipients of
information transmitted by the Company's customers objecting to the nature and
content of the materials disseminated through the Company's networks. Several
private lawsuits seeking to impose such liability upon online services companies
and Internet access providers are currently pending. In addition, legislation
has been proposed that imposes liability for or prohibits the transmission over
the Internet of certain types of information. The imposition upon the Company
and other Internet network providers of potential liability for information
carried on or disseminated through their systems could require the Company to
implement measures to reduce its exposure to such liability, which may require
the expenditure of substantial resources, or to discontinue certain service
offerings. The increased attention focused upon liability issues as a result of
these lawsuits and legislative proposals could impact the growth of Internet
use. While the Company carries general liability insurance, it may not be
adequate to compensate or may not cover the Company in the event the Company
becomes liable for information carried on or disseminated through its networks.
Any costs not covered by insurance incurred as a result of such liability or
asserted liability could have a material adverse effect on the Company's
business,
                                       12
<PAGE>   22
 
results of operations and financial condition. In addition, there can be no
assurance that content distributed by certain of the Company's current or future
customers will not be regulated or banned, which could reduce the Company's
customer base. Certain businesses, organizations and individuals have in the
past sent unsolicited commercial e-mails from servers hosted at the Company's
facilities to massive numbers of people, typically to advertise products or
services. This practice, known as "spamming," can lead to complaints against
service providers that enable such activities, particularly where recipients
view the materials received as offensive. There can be no assurance certain ISPs
and other online services companies would not deny network access to the Company
if undesired content or spamming were to be transmitted from servers hosted by
the Company, which could have a material adverse effect on the Company's
business, results of operations and financial condition.
 
     Limited Protection of Proprietary Technology; Risk of Infringement. The
Company relies on a combination of copyright, trademark, service mark and trade
secret laws and contractual restrictions to establish and protect certain
proprietary rights in its services. The Company has no patented technology that
would preclude or inhibit competitors from entering the Company's market. There
can be no assurance that the steps taken by the Company to protect its
intellectual property will prove sufficient to prevent misappropriation of the
Company's technology or to deter independent third-party development of similar
technologies. The laws of certain foreign countries may not protect the
Company's services or intellectual property rights to the same extent as do the
laws of the U.S. To date, the Company has not been notified that the Company
infringes the proprietary rights of third parties, but there can be no assurance
that third parties will not claim infringement by the Company with respect to
current or future products. Any such claim, whether meritorious or not, could be
time-consuming, result in costly litigation, cause service delays or require the
Company to enter into royalty or licensing agreements. Such royalty or licensing
agreements might not be available on terms acceptable to the Company or at all.
As a result, any such claim could have a material adverse effect upon the
Company's business, results of operations and financial condition.
 
     Uncertain Need and Availability of Additional Funding. The Company expects
to incur significant expenditures as part of its planned expansion, including
increases in sales and marketing expenses and expenditures for new and expanded
co-location facilities. Although the Company believes that, following this
offering, its cash reserves and available borrowings will be adequate to fund
the Company's operations for at least the next 12 months, there can be no
assurance that such sources will be adequate or that additional funds will not
be required either during or after such 12 month period. In addition, any
incremental development of additional co-location space at the planned ISX
facility in San Jose, California will require additional debt or equity
financing. No assurance can be given that additional financing will be available
or that, if available, it will be available on terms favorable to the Company or
its stockholders. If additional funds are raised through the issuance of equity
securities, the percentage ownership of the then current stockholders of the
Company could be significantly diluted and such equity securities may have
rights, preferences or privileges senior to those of the holders of the
Company's Common Stock. If adequate funds are not available to satisfy either
short or long-term capital requirements, the Company may be required to limit
its operations and expansion plans significantly, sell assets, or seek to
refinance outstanding obligations, any of which could have a material adverse
effect on the Company's business, results of operations and financial condition.
 
     Year 2000 Risks. Many currently installed computer systems and software
products are coded to accept only two digit entries in the date code field.
These date code fields will need to distinguish 21st century dates from 20th
century dates. This could result in system failures or miscalculations causing
disruptions of operations including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities. As a result, many companies' software and computer systems may need
to be upgraded or replaced in order to comply with such "Year 2000"
requirements. The Company is in the process of establishing procedures for
evaluating and managing the risks and costs associated with this problem and
believes that its computer systems on a stand-alone basis are currently Year
2000 compliant. There can be no assurance, however, that the Company's computer
systems are Year 2000 compliant. In addition, many of the Company's customers'
and suppliers' Internet operations may be impacted by Year 2000
 
                                       13
<PAGE>   23
 
complications. The failure of the Company's customers or suppliers to ensure
that their systems are Year 2000 compliant could have a material adverse effect
on the Company's customers and suppliers resulting in decreased Internet usage
or the delay or inability to obtain necessary data communication and
telecommunication capacity, which in turn could have a material adverse effect
on the Company's business, results of operations and financial condition.
 
     Substantial Influence by Principal Stockholders, Executive Officers and
Directors. The Company's executive officers, directors and greater than 5%
stockholders (and their affiliates), in the aggregate, own approximately 30% of
the Company's outstanding Common Stock. As a result, such persons, acting
together, have the ability to substantially influence all matters submitted to
stockholders of the Company for approval (including the election and removal of
directors and any merger, consolidation or sale of all or substantially all of
the Company's assets) and to control the management and affairs of the Company.
Accordingly, such concentration of ownership may have the effect of delaying,
deferring or preventing a change in control of the Company, impeding a merger,
consolidation, takeover or other business combination involving the Company or
discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of the Company, which in turn could have an adverse
effect on the value of the Company.
 
     Recently Established Trading Market for the Common Stock; Potential
Volatility of Stock Price. The public market for the Common Stock was only
established on December 10, 1998 and there can be no assurance that an active
trading market will develop or be sustained.

     The market price of the shares of Common Stock is likely to be highly
volatile and could be subject to wide fluctuations in response to factors such
as actual or anticipated variations in the Company's results of operations,
announcements of technological innovations, new services introduced by the
Company or its competitors, changes in financial estimates by security analysts,
conditions and trends in the Internet, general market conditions and other
factors. Furthermore, the stock markets, and in particular the Nasdaq National
Market, have experienced extreme price and volume fluctuations that have
particularly affected the market prices of equity securities of many technology
companies and that often have been unrelated or disproportionate to the
operating performance of such companies. The trading prices of many technology
companies' stocks are at or near historical highs and reflect price to earnings
ratios substantially above historical levels. There can be no assurance that
these trading prices and price to earnings ratios will be sustained. These broad
market factors may adversely affect the market price of the Company's Common
Stock. These market fluctuations, as well as general economic, political and
market conditions such as recessions, interest rate changes or international
currency fluctuations, may adversely affect the market price of the Common
Stock. In the past, following periods of volatility in the market price of a
company's securities, class action litigation has often been instituted against
such companies. Such litigation, if instituted, could result in substantial
costs and a diversion of management's attention and resources, which would have
a material adverse effect on the Company's business, results of operations and
financial condition.
 
                                       14
<PAGE>   24
 
     Antitakeover Effects of Certain Charter Provisions, Bylaws and Delaware
Law. Certain provisions of the Company's Certificate of Incorporation and Bylaws
may have the effect of making it more difficult for a third party to acquire, or
of discouraging a third party from attempting to acquire, control of the
Company. Pursuant to the terms of the Company's Certificate of Incorporation
which will be effective upon the consummation of this offering, the Board of
Directors has the authority to issue up to 5,000,000 shares of Preferred Stock
and to determine the price, rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by
the Company's stockholders. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future (including, but not limited to,
preferences of the Preferred Stock with respect to the payment of dividends and
upon liquidation, dissolution or winding up). The issuance of Preferred Stock,
while providing desirable flexibility in connection with possible acquisitions
and other corporate purposes, could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue shares of Preferred Stock. In
addition, certain provisions of the Company's Certificate of Incorporation
eliminate the right of stockholders to act by written consent without a meeting.
Furthermore the Company's Certificate of Incorporation provides for a classified
Board of Directors such that approximately only one-third of the members of the
Board of Directors are elected at each annual meeting of stockholders.
Classified Boards may have the effect of delaying, deferring or discouraging
changes in control of the Company. Further, certain provisions of Delaware law
could delay or make difficult a merger, tender offer or proxy contest involving
the Company. Section 203 of the General Corporation Law of the State of
Delaware, which is applicable to the Company, prohibits certain business
combinations with certain stockholders for a period of three years after they
acquire 15% or more of the outstanding voting stock of a corporation.
 
     Shares Eligible for Future Sale. Sales of substantial amounts of the
Company's Common Stock (including shares issued upon the exercise of outstanding
options and warrants) in the public market after this offering could adversely
affect the market price of the Common Stock. Such sales also might make it more
difficult for the Company to sell equity-related securities in the future at a
time and price that the Company deems appropriate. In addition to the 126,975
shares of Common Stock offered hereby as of the date of this Prospectus, there
are 12,817,680 shares of Common Stock outstanding, of which 7,817,680 are
restricted shares ("Restricted Shares") under the Securities Act of 1933, as
amended (the "Securities Act"). As of such date, approximately 62,500 Restricted
Shares are eligible for sale in the public market and 43,682 Restricted Shares
will be eligible for sale 84 days after such date. 5,187,345 Restricted Shares,
which are subject to lock-up agreements with either the Company or CIBC
Oppenheimer Corp., will be available for sale in the public market 174 days
after such date, and the remaining Restricted Shares will be eligible for sale
from time to time thereafter upon expiration of applicable holding periods under
Rule 144 under the Securities Act. In addition, as of September 30, 1998, there
were outstanding 1,555,756 options and 69,843 warrants to purchase Common Stock.
CIBC Oppenheimer Corp. may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to lock-up
agreements. In addition, the holders of approximately 7,359,131 Restricted
Shares are entitled to certain rights with respect to registration of such
shares for sale in the public market. If such holders sell in the public market,
such sales could have a material adverse effect on the market price of the
Company's Common Stock.
 
     Dilution. The Company has issued options and warrants to acquire Common
Stock at prices significantly below the price per share of $12.9375 as reported
on the Nasdaq National Market on December 15, 1998. To the extent such
outstanding options and warrants are exercised, there will be dilution.
 
                                       15
<PAGE>   25

                             REGISTERED STOCKHOLDERS

        The Reoffer Prospectus relates to shares of Common Stock which have been
acquired by certain key employees of the Company, Sherman Tuan and Warren J.
Kaplan, (the "Registered Stockholders"). Mr. Tuan acquired his shares of Common
Stock pursuant to the exercise of options granted under the 1996 Stock Option
Plan. The address of Mr. Tuan is 1927 Wellington Drive, Milpitas, California
95035. Mr. Kaplan acquired his shares of Common Stock pursuant to the Employment
Agreement between the Company and such person dated as of November 10, 1997. The
address of Mr. Kaplan is 14690 Stoneridge Drive, Saratoga, California 95070.

        The following table sets forth certain information with respect to the
Registered Stockholders as of December 15, 1998:


<TABLE>
<CAPTION>
                                     Number of           Number of        Number of    Percentage of  
                      Position    Shares Owned as        Shares to         Shares      Shares Owned   
    Registered          with             of                  be          Owned After       After      
   Stockholder      the Company   December 9, 1998    Offered Hereby      Offering     Offering (1)   
<S>                 <C>           <C>                 <C>                <C>           <C>

Sherman Tuan        Chief             181,875              56,875           125,000          *
                    Executive
                    Officer

   
Warren J. Kaplan    President          72,082              70,082             2,000          * 
                    and Chief
                    Operating
                    Officer
</TABLE>
    
 *  less than 1%.

(1) Percentage of ownership is calculated assuming 12,833,305 shares of Common
Stock were outstanding on December 15, 1998.

        Shares of Common Stock covered by this Reoffer Prospectus may be offered
and sold from time to time by the Registered Stockholders through brokers
through the Nasdaq National Market System or otherwise, at the prices prevailing
at the time of such sales. To the Company's knowledge, no specific brokers or
dealers have been designated by the Registered Stockholders nor has any
agreement been entered into in respect of brokerage commissions or for the
exclusive or coordinated sale of any securities which may be offered pursuant to
this Reoffer Prospectus. The Company will pay all expenses of preparing and
reproducing this Reoffer Prospectus, but will not 


                                       16
<PAGE>   26
receive the proceeds from sales by the Registered Stockholders. On December 15,
1998, the average of the high and low selling prices per share of the Common
Stock as reported on the NASDAQ National Market System was $12.9375.


                              PLAN OF DISTRIBUTION

        The shares of Common Stock covered by this Reoffer Prospectus are being
registered by the Company for the account of the Registered Stockholders. The
Company understands that none of such shares will be offered through
underwriters.

        Shares of Common Stock covered by this Reoffer Prospectus may be offered
and sold from time to time by the Registered Stockholders through the NASDAQ
National Market System, the over-the-counter market, negotiated transactions or
otherwise, at the prices prevailing at the time of such sales, at prices
relating to such prevailing market prices or at prices otherwise negotiated. To
the Company's knowledge, no specific brokers or dealers have been designated by
the Registered Stockholders nor has any agreement been entered into in respect
of brokerage commissions or for the exclusive or coordinated sale of any
securities which may be offered pursuant to this Reoffer Prospectus. The
Registered Stockholders and any broker dealer through whom sales are made by the
Registered Stockholders may be regarded as "underwriters" within the meaning of
the Securities Act although the Registered Stockholders disclaims such status,
and his compensation may be regarded as underwriter's compensation.

        The Company will not receive any of the proceeds from the offering
hereunder. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all selling and other expenses
incurred by the individual Registered Stockholders will be borne by such
Registered Stockholders.

        On December 15, 1998, the average of the high and low selling prices of
the Common Stock, as reported on the NASDAQ National Market System, was $12.9375
per share.


                                       17
<PAGE>   27
                       DOCUMENTS INCORPORATED BY REFERENCE

        AboveNet Communications Inc. ("AboveNet") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):

        (b)     AboveNet's prospectus filed with the SEC pursuant to Rule 424(b)
                under the Securities Act of 1933, as amended (the "1933 Act"),
                in connection with Registration Statement No. 333-63141 on Form
                S-1 filed with the SEC on September 10, 1998, the amendment
                filed on October 5, 1998 the amendment filed on October 21,
                1998, the amendment filed on November 6, 1998, the amendment
                filed on November 16, 1998, the amendment filed on December 7,
                1998 and the amendment filed on December 8, 1998, in which there
                are set forth audited financial statements for AboveNet's fiscal
                years ended June 30, 1997 and 1998;

        (c)     AboveNet's Registration Statement No. 0-25063 on Form 8-A filed
                with the SEC on November 16, 1998 under Section 12 of the
                Securities Exchange Act of 1934, as amended (the "1934 Act"),
                together with amendments thereto, in which there is described
                the terms, rights and provisions applicable to AboveNet's
                outstanding Common Stock.

        All reports and definitive proxy or information statements filed under
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall also be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents.


                                 INDEMNIFICATION

        Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. The
Registrant's Bylaws provide for mandatory indemnification of its directors and
officers and permissible indemnification of employees and other agents to the
maximum extent permitted by the Delaware General Corporation Law. The
Registrant's Certificate of Incorporation provides that, pursuant to Delaware
law, its directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty as directors to the Registrant and its stockholders.
This provision in the Certificate of Incorporation does not eliminate the
directors' fiduciary duty, and in appropriate circumstances equitable remedies,
such as injunctive or other forms of non-monetary relief, will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Registrant for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit of
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law.


                                       18
<PAGE>   28
                                  EXHIBIT INDEX


Exhibit Number      Exhibit

        4           Instrument Defining Rights of Stockholders. Reference is
                    made to AboveNet's Registration Statement No. 0-25063 on
                    Form 8-A, which is incorporated herein by reference
                    under Item 3(d) of this Registration Statement.

        5           Opinion and consent of Gunderson Dettmer Stough
                    Villeneuve Franklin & Hachigian, LLP.

        23.1        Independent Auditors' Consent.

        23.2        Consent of Gunderson Dettmer Stough Villeneuve Franklin
                    & Hachigian, LLP is contained in Exhibit 5.

        24          Power of Attorney. Reference is made to page II-5 of
                    this Registration Statement.

        99.1        Written Compensation Agreement with Sherman Tuan.

        99.2        Written Compensation Agreement with Warren J. Kaplan.
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 100466}]
{"company-data": {"conformed-name": "ABOVENET COMMUNICATIONS INC", "cik": "0001026819", "assigned-sic": "7373", "irs-number": "770424796", "state-of-incorporation": "CA", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-69287", "film-number": "98772445"}, "business-address": {"street1": "50 W SAN FERNANDO ST", "street2": "SE 1010", "city": "SAN JOSE", "state": "CA", "zip": "95113", "phone": "4083676666"}, "mail-address": {"street1": "50 W SAN FERNANDO", "street2": "STE 1010", "city": "SAN JOSE", "state": "CA", "zip": "95113"}}
1
   As filed with the Securities and Exchange Commission on December 18, 1998
                                                     Registration No. 333-______
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               -------------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      Under
                           THE SECURITIES ACT OF 1933
                               -------------------

                          ABOVENET COMMUNICATIONS INC.
             (Exact name of Registrant as specified in its charter)
DELAWARE                           4813                   77-0424796
  (State or other jurisdiction     (Primary Standard Industrial      (IRS Employer
of incorporation or organization)   Classification Code Number)   Identification No.)
50 W. SAN FERNANDO STREET, SUITE #1010
                           SAN JOSE, CALIFORNIA 95113
                                 (408) 367-6666
               (Address of principal executive offices) (Zip Code)
                               -------------------

             ABOVENET COMMUNICATIONS INC. 1998 STOCK INCENTIVE PLAN
         ABOVENET COMMUNICATIONS INC. 1998 EMPLOYEE STOCK PURCHASE PLAN
                  ABOVENET COMMUNICATIONS INC. 1997 STOCK PLAN
               ABOVENET COMMUNICATIONS INC. 1996 STOCK OPTION PLAN
     SHARES ACQUIRED UNDER WRITTEN COMPENSATION AGREEMENT WITH SHERMAN TUAN
      SHARES AND OPTIONS GRANTED UNDER WRITTEN COMPENSATION AGREEMENT WITH
                                WARREN J. KAPLAN
                            (Full title of the Plans)
                               -------------------

                                  SHERMAN TUAN
                              CHAIRMAN OF THE BOARD
                           AND CHIEF EXECUTIVE OFFICER
                          ABOVENET COMMUNICATIONS INC.

                     50 W. SAN FERNANDO STREET, SUITE #1010
                           SAN JOSE, CALIFORNIA 95113
                     (Name and address of agent for service)
                                 (408) 367-6666
          (Telephone number, including area code, of agent for service)
                               -------------------
CALCULATION OF REGISTRATION FEE
============================================================================================================
         Title of                                         Proposed Maximum  Proposed Maximum
        Securities                          Amount           Offering          Aggregate         Amount of
           to be                             to be             Price            Offering        Registration
        Registered                       Registered(1)       per Share          Price(2)            Fee
        ----------                       -------------    ----------------  ----------------    ------------
AboveNet Communications Inc.
1998 Stock Incentive Plan
    Options                                1,562,500            N/A                N/A               N/A
    Common Stock (par value $.001)      1,562,500 shares     $12.9375(2)     $20,214,843.75(2)     $5,619.73

AboveNet Communications Inc.
1998 Employee Stock Purchase Plan
    Common Stock (par value $.001)       156,250 shares      $12.9375(2)      $2,021,484.38(2)       $561.98
2
AboveNet Communications Inc.
1997 Stock Plan and 
AboveNet Communications Inc.
1996 Stock Option Plan 
Options                                  1,433,159               N/A              N/A              N/A
    Common Stock (par value $.001)     1,433,159 shares          $4.67(3)    $6,692,852.53(3)    $1,860.62

Shares Acquired Under Written
Compensation Agreement with
Sherman Tuan
    Common Stock (par value $.001)        56,875 shares       $12.9375(2)      $735,820.32(2)      $204.56

Options Granted Under Written
Compensation Agreement with
Warren J. Kaplan
    Options                                  421,923              N/A              N/A               N/A
    Common Stock (par value $.001)       421,923 shares          $0.40(3)      $168,769.20(3)       $46.92

Shares Acquired Under Written
Compensation Agreement with
Warren J. Kaplan
    Common Stock (par value $.001)        70,082 shares        $12.9375(2)     $906,685.88(2)      $252.06
(1)  This Registration Statement shall also cover any additional shares of
     Common Stock which become issuable under the 1998 Stock Incentive Plan, the
     1998 Employee Stock Purchase Plan, the 1997 Stock Plan, the 1996 Stock
     Option Plan and the Shares Acquired under the Written Compensation
     Agreement with Sherman Tuan and the Shares and Options Granted Under
     Written Compensation Agreement with Warren J. Kaplan because of any stock
     dividend, stock split, recapitalization or other similar transaction
     effected without the receipt of consideration which results in an increase
     in the number of the outstanding shares of Common Stock of AboveNet
     Communications Inc.

(2)  Calculated only for purposes of this offering under Rule 457(h) of the
     Securities Act of 1933, as amended, on the basis of the average of the high
     and low prices per share of Common Stock of AboveNet Communications Inc. on
     the Nasdaq National Market on December 15, 1998.

(3)  Calculated only for purposes of this offering under Rule 457(h) of the
     Securities Act of 1933, as amended, on the basis of the weighted average
     exercise price of the outstanding options.
3
                                EXPLANATORY NOTE

        Pursuant to General Instruction C of Form S-8, this Registration
Statement contains a prospectus meeting the requirements of Part I of Form S-3
relating to the reoffer by a certain individual of shares of common stock, par
value $0.001 per share, of AboveNet Communications, Inc. acquired pursuant to a
Written Agreement.
4
                          ABOVENET COMMUNICATIONS, INC.

         FORM S-8 CROSS REFERENCE SHEET SHOWING LOCATION OF INFORMATION
                         REQUIRED BY PART I OF FORM S-3
Form S-3 Item Number                             Location/Heading in Prospectus
--------------------                             ------------------------------
1.  Forepart of Registration Statement and       Cover page
    Outside Front Cover page of Prospectus
2.  Inside Front and Outside Back Cover          Available Information; Incorporation of
    Page of Prospectus                           Certain Information by Reference
3.  Summary Information, Risk Factors and        Risk Factors
    Ratio of Earnings to Fixed Charges
4.  Use of Proceeds                              Not applicable
5.  Determination of Offering Price              Not applicable
6.  Dilution                                     Not applicable
7.  Selling Security Holder                      Selling Security Holder
8.  Plan of Distribution                         Plan of Distribution
9.  Description of Securities to be              Not Applicable
    Registered
10. Interests of Named Experts and Counsel       Not Applicable
11. Material Changes                             Not Applicable
12. Incorporation of Certain Information         Documents Incorporated by Reference
13. Disclosure of Commission Position on         Indemnification
    Indemnification for Securities Act
    Liabilities
5
                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference

        AboveNet Communications Inc. ("AboveNet") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):

        (a)     AboveNet's prospectus filed with the SEC pursuant to Rule 424(b)
                under the Securities Act of 1933, as amended (the "1933 Act"),
                in connection with Registration Statement No. 333-63141 on Form
                S-1 filed with the SEC on September 10, 1998, the amendment
                filed on October 5, 1998 the amendment filed on October 21,
                1998, the amendment filed on November 6, 1998, the amendment
                filed on November 16, 1998, the amendment filed on December 7,
                1998 and the amendment filed on December 8, 1998, in which there
                are set forth audited financial statements for AboveNet's fiscal
                years ended June 30, 1997 and 1998;

        (b)     AboveNet's Registration Statement No. 0-25063 on Form 8-A filed
                with the SEC on November 16, 1998 under Section 12 of the
                Securities Exchange Act of 1934, as amended (the "1934 Act"),
                together with amendments thereto, in which there is described
                the terms, rights and provisions applicable to AboveNet's
                outstanding Common Stock.

        All reports and definitive proxy or information statements filed under
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall also be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents.

Item 4. Description of Securities

        Not Applicable.

Item 5. Interests of Named Experts and Counsel

        Not Applicable.

Item 6. Indemnification of Directors and Officers

        Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. AboveNet's
Bylaws provide for mandatory indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. AboveNet's Certificate of
Incorporation provides that, under Delaware law, its directors shall not be
liable for monetary damages for breach of their fiduciary duty as directors to
AboveNet and its stockholders. This provision in the Certificate of
Incorporation does not eliminate the fiduciary duty of the directors, and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to AboveNet for acts or omissions not in good faith
or involving intentional misconduct, for knowing violations of law, for actions
leading to improper personal benefit to the director and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. AboveNet has entered into Indemnification
Agreements with its officers and directors. The Indemnification Agreements
provide AboveNet's officers and directors with further indemnification to the
maximum extent permitted by the Delaware General Corporation Law.

                                      II-1
6
Item 7. Exemption from Registration Claimed

        Not Applicable.

Item 8. Exhibits

Exhibit Number      Exhibit

        4           Instrument Defining Rights of Stockholders. Reference is
                    made to AboveNet's Registration Statement No. 0-25063 on
                    Form 8-A, which is incorporated herein by reference
                    under Item 3(d) of this Registration Statement.

        5           Opinion and consent of Gunderson Dettmer Stough
                    Villeneuve Franklin & Hachigian, LLP.

        23.1        Independent Auditors' Consent.

        23.2        Consent of Gunderson Dettmer Stough Villeneuve Franklin
                    & Hachigian, LLP is contained in Exhibit 5.

        24          Power of Attorney. Reference is made to page II-5 of
                    this Registration Statement.

        99.1        Written Compensation Agreement with Sherman Tuan.

        99.2        Written Compensation Agreement with Warren J. Kaplan.

Item 9. Undertakings

        A.      AboveNet hereby undertakes:

                (1)     to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement

                        (i)     to include any prospectus required by Section
                                10(a)(3) of the 1933 Act,

                        (ii)    to reflect in the prospectus any facts or events
                                arising after the effective date of this
                                Registration Statement (or the most recent
                                post-effective amendment thereof) which,
                                individually or in the aggregate, represent a
                                fundamental change in the information set forth
                                in this Registration Statement and

                        (iii)   to include any material information with respect
                                to the plan of distribution not previously
                                disclosed in this Registration Statement or any
                                material change to such information in this
                                Registration Statement; provided, however, that
                                clauses (1)(i) and (1)(ii) shall not apply if
                                the information required to be included in a
                                post-effective amendment by those paragraphs is
                                contained in periodic reports filed with or
                                furnished to the SEC by AboveNet under Section
                                13 or Section 15(d) of the 1934 Act that are
                                incorporated by reference in this Registration
                                Statement;

                (2)     that for the purpose of determining any liability under
the 1933 Act each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof and

                (3)     to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of AboveNet's 1998 Stock Incentive Plan, the 1998 Employee Stock
Purchase Plan, the 1997 Stock Plan, the 1996 Stock Option Plan, the Shares
Acquired under the Written Compensation Agreement with Sherman Tuan and the
Shares and Options Granted Under the Written Compensation Agreement with Warren
J. Kaplan.

                                      II-2
7
        B.      AboveNet undertakes that, for purposes of determining any
liability under the 1933 Act, each filing of AboveNet's annual report under
Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

        C.      Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers or controlling persons of
AboveNet under the indemnification provisions summarized in Item 6 or otherwise,
AboveNet has been advised that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the 1933 Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by AboveNet of expenses incurred or paid by
a director, officer or controlling person of AboveNet in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, AboveNet
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.

                                      II-3
8
REOFFER PROSPECTUS

                                   SIGNATURES

        The Securities Act of 1933, as amended, requires that AboveNet certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has had this Registration Statement signed on its
behalf by the undersigned, who is duly authorized, in the City of San Jose,
State of California on this 18th day of December, 1998.

                                       ABOVENET COMMUNICATIONS INC.

                                       By: /s/  SHERMAN TUAN       
                                           -------------------------------------
                                           Chief Executive Officer

                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

        That the undersigned officers and directors of AboveNet Communications
Inc., a Delaware corporation, do hereby constitute and appoint Sherman Tuan and
Stephen P. Belomy, and either of them, the lawful attorneys-in-fact and agents
with full power and authority to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, and either one of them,
determine may be necessary or advisable or required to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or either one of them, shall do or cause to
be done by virtue hereof. This Power of Attorney may be signed in several
counterparts.

        IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.

        Under the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature                              Title                                           Date
---------                              -----                                           ----
/s/     SHERMAN TUAN                   Chairman of the Board,
----------------------------------        Chief Executive Officer and           December 18, 1998   
        Sherman Tuan                      Director                                            
                                          (Principal Executive Officer)                       
                                          

/s/     DAVID F. LARSON                Senior Vice President and Chief          December 18, 1998
----------------------------------        Financial Officer                
        David F. Larson                   (Principal Financial Officer)
9
REOFFER PROSPECTUS
/s/     KEVIN HOURIGAN                  Vice President of Finance and           December 18, 1998
----------------------------------        Controller (Chief Accounting 
        Kevin Hourigan                    Officer)

/s/     PETER C. CHEN, Ph.D.            Vice Chairman of the Board              December 18, 1998
----------------------------------        and Director
        Peter C. Chen, Ph.D.              

/s/     WARREN J. KAPLAN                President, Chief Operating Officer      December 18, 1998
----------------------------------        and Director
        Warren J. Kaplan                  

/s/     ROBERT A. BURGELMAN             Director                                December 18, 1998
----------------------------------
        Robert A. Burgelman

/s/     FRANK R. KLINE                  Director                                December 18, 1998
----------------------------------
        Frank R. Kline

/s/     JAMES SHA                       Director                                December 18, 1998
----------------------------------
        James Sha

/s/     TOM SHAO, Ph.D.                 Director                                December 18, 1998
----------------------------------
        Tom Shao, Ph.D.

/s/     KIMBALL W. SMALL                Director                                December 18, 1998
----------------------------------
        Kimball W. Small

/s/     FRED A. VIERRA                  Director                                December 18, 1998
----------------------------------
        Fred A. Vierra
10
REOFFER PROSPECTUS

                                 126,975 Shares
                          AboveNet Communications Inc.
                                  Common Stock

        This Reoffer Prospectus relates to 126,975 shares of the Common Stock,
par value $.001 (the "Common Stock"), of AboveNet Communications Inc. (the
"Company"), which may be offered from time to time by the Registered
Stockholders named herein (the "Registered Stockholders"). It is anticipated
that the Registered Stockholders will offer shares for sale at prevailing prices
on the Nasdaq National Market System on the date of sale. The Company will
receive no part of the proceeds of sale made hereunder. All expenses of
registration incurred in connection with this offering are being borne by the
Company, but all selling and other expenses incurred by the Registered
Stockholders will be borne by such Registered Stockholders.

        The Company's Common Stock is traded on the Nasdaq National Market 
System under the symbol ABOV. On December 15, 1998, the average of the high and 
low selling prices of the Common Stock was $12.9375 per share.

        The Registered Stockholders and any broker executing selling orders on
behalf of the Registered Stockholders may be deemed to be an "underwriter"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), in which event commissions received by such broker may be deemed to be
underwriting commissions under the Securities Act.

          THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE
       CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
                                   INVESTMENT.
                     SEE "RISK FACTORS" BEGINNING ON PAGE 5.

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
         AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
           ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
                     TO THE CONTRARY IS A CRIMINAL OFFENSE.

        No person is authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any Registered Stockholders. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.

        The date of this Prospectus is December 15, 1998.
11
                              AVAILABLE INFORMATION

        The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices at 219 South Dearborn Street, Chicago,
IL 60604; 26 Federal Plaza, New York, NY 10007; and 5757 Wilshire Boulevard, Los
Angeles, CA 90036, at prescribed rates. The Common Stock of the Company is
quoted on the Nasdaq National Market System. Reports, proxy statements,
informational statements and other information concerning the Company can be
inspected at the offices of the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.

        The Company intends to furnish its stockholders with annual reports
containing additional financial statements and a report thereon by independent
certified public accountants.

        A copy of any document incorporated by reference in the Registration
Statement (not including exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by reference into
the information that the Registration Statement incorporates) of which this
Reoffer Prospectus forms a part but which is not delivered with this Reoffer
Prospectus will be provided by the Company without charge to any person
(including any beneficial owner) to whom this Reoffer Prospectus has been
delivered upon the oral or written request of such person. Such requests should
be directed to the Stock Plan Administrator, AboveNet Communications Inc., 50 W.
San Fernando Street, Suite #1010, San Jose, California 95113. The Company's
telephone number is (408) 367-6666.

                                TABLE OF CONTENTS
Page
THE COMPANY..................................................................................3

RISK FACTORS.................................................................................5

REGISTERED STOCKHOLDERS.....................................................................16

PLAN OF DISTRIBUTION........................................................................17

DOCUMENTS INCORPORATED BY REFERENCE.........................................................18

INDEMNIFICATION.............................................................................18
2
12
       
                                  THE COMPANY
 
     AboveNet Communications Inc. ("AboveNet" or the "Company") is a leading
provider of high performance, managed co-location and Internet connectivity
solutions for electronic commerce and other mission-critical Internet
operations. AboveNet has developed a network architecture based upon two
strategically located, fault-tolerant facilities that combine content
co-location services with direct ISP access to create Internet Service Exchanges
("ISXs"). As of September 30, 1998, the Company had 171 public and private data
exchange connections, known as peering arrangements, including relationships
with top-tier network providers. The Company's network architecture and
extensive peering relationships are designed to reduce the number of network
connections or "hops" for data travelling across the Internet. Furthermore, the
convergence of content providers and ISPs at AboveNet's ISXs enables these ISPs
to provide their users with "one hop" connectivity, through AboveNet's local
area network, to the co-located content site. As of September 30, 1998, the
Company had 316 customers including a wide range of Internet content providers,
Web hosting companies and ISPs.
 
     The Internet has experienced tremendous growth and is emerging as a global
medium for communications and commerce. Internet-based businesses and other
enterprises need non-stop, non-congested, fault-tolerant and scalable Internet
operations to allow them to perform mission-critical digital communication and
electronic commerce transactions globally over the Internet. However, many
businesses that are seeking to establish these sophisticated Internet operations
lack the resources and expertise to cost-effectively develop, maintain and
enhance the necessary facilities and network systems. As a result, many
enterprises are seeking outsourcing arrangements to enhance Web site reliability
and performance, provide continuous operation of their Internet solutions and
reduce related operating expenses. Forrester Research, Inc.(1) estimates that by
2002, approximately 40% of complex Web sites will be outsourced and that
Internet hosting revenues for complex sites will increase from approximately
$200 million in 1997 to approximately $8.0 billion by 2002.
 
     AboveNet's solutions are designed to be highly scalable and flexible to
meet the needs of its customers as their Internet operations expand. AboveNet
charges its customers based on space and bandwidth utilization, providing
customers a flexible, cost-effective method to increase their Internet
operations. The Company's services are designed to enhance performance through
redundant and high speed network design and 24x7 monitoring, notification and
diagnosis. AboveNet's proprietary ASAP software monitors all of the Company's
direct and indirect network connections for latency and packet loss, allowing
its network engineers to enhance performance by dynamically rerouting traffic to
avoid congested points. The Company also provides its customers with
sophisticated monitoring, reporting and management tools that can be remotely
accessed by the customer to control its Internet operations. By providing a
means to reduce the number of "hops" in the transmission of data, the Company
believes that its network design can provide significant benefits to ISPs as
they seek to gain fast, reliable access to content.
 
     The Company's objective is to become the leading global Internet Service
Exchange for business enterprises and ISPs that require high-bandwidth,
mission-critical Internet operations. To achieve this objective, the Company
intends to: (i) increase awareness of the AboveNet name on a global basis;

                                       3
13
---------------
 
    (1) Forrester Research, Inc. estimates are based upon interviews with more
than 41,000 households as part of its "Technographics '98" survey. In addition,
the report stated that 81 ISPs were asked to provide detailed unit sales, prices
and projections for 1996 through 1998. The ISP data was extrapolated to provide
a total current market size and direction. Finally, 22 vendors of hosting
services and related organizations were contacted. There can be no assurances
that actual results will not differ materially from those estimated.

 
(ii) expand its customer base through increased sales and marketing efforts;
(iii) expand its global ISX network by connecting centralized facilities in key
domestic and international locations; (iv) leverage its ISX model to increase
its customer base and generate recurring revenues; and (v) address the emerging
requirements of Internet technologies such as audio and video streaming and
voice over IP.
 
     The Company's customers include CNET Download.com, Dacom America,
Electronic Arts Inc., Got.Net, Imagine Radio, IntelliChoice, Inc., iXL, Inc.,
Netscape Communications Corporation, RealNetworks, Inc. and The Web Zone, Inc.
The Company intends to expand its customer base by substantially expanding its
sales organization, as well as establishing and expanding relationships with
potential channel partners including hardware vendors, value added resellers,
system integrators and Web hosting companies, to leverage their sales
organizations. The Company also plans to invest in building the AboveNet brand
through an integrated marketing plan, including traditional and online
advertising in business and trade publications, trade show participation, direct
mail and public relations campaigns.
 
     The Company was incorporated in California in March 1996 and reincorporated
in Delaware in November 1998. The Company's principal executive offices are
located at 50 W. San Fernando Street, Suite #1010, San Jose, California 95113,
and its telephone number is (408) 367-6666.
 
     EtherValve is a registered trademark of the Company. Cabriolet and MRTG are
trademarks of the Company. The Company has applied for federal trademark
registration for the following names: AboveNet APS, ASAP, As-Ur-Here, Internet
Service Exchange and ISX. All other trademarks, servicemarks or tradenames
referred to in this Prospectus are the property of their respective owners.
 
        AboveNet's executive offices are located at 50 W. San Fernando Street,
Suite #1010, San Jose, California 95113. The Company's telephone number is (408)
367-6666.

                                       4
14
 
                                  RISK FACTORS
 
     An investment in the shares of Common Stock offered hereby is speculative
in nature and involves a high degree of risk. In addition to the other
information contained in this Prospectus, the following factors should be
considered carefully in evaluating the Company and its business before
purchasing the shares of Common Stock offered hereby. This Prospectus contains
certain forward-looking statements based on current expectations that involve
risks and uncertainties. Any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements. For example,
the words "believes," "anticipates," "plans," "expects," "intends" and similar
expressions are intended to identify forward-looking statements. The Company's
actual results and the timing of certain events may differ significantly from
the results discussed in the forward-looking statements. Factors that might
cause such a discrepancy include, but are not limited to, those discussed below
and elsewhere in this Prospectus.
 
     Limited Operating History; History of Losses; Expected Continued
Losses. The Company was incorporated in March 1996 and has experienced operating
losses in each quarterly and annual period since inception. The Company
experienced net losses of $1.8 million, $5.4 million and $3.4 million in fiscal
years 1997 and 1998, and for the three months ended September 30, 1998,
respectively, and, as of September 30, 1998, had an accumulated deficit of
approximately $10.7 million. The Company began offering its co-location and
Internet connectivity services to content providers in July 1996, and introduced
its co-location and Internet connectivity services to ISPs in August 1997. The
Company began operating its second ISX facility in Vienna, Virginia in July
1998. The revenue and income potential of the Company's business and market is
unproven, and the Company's limited operating history makes an evaluation of the
Company and its prospects difficult. The Company and its prospects must be
considered in light of the risks, expenses and difficulties encountered by
companies in the new and rapidly evolving market for co-location and Internet
connectivity services. The Company expects to continue making significant
investments to (i) substantially increase its sales and marketing activities and
(ii) establish a second ISX facility in San Jose, California of approximately
110,000 square feet, including approximately 50,000 square feet of co-location
space. The Company believes that it will continue to experience net losses on a
quarterly and annual basis for the foreseeable future, and such losses are
expected to increase significantly from current levels. To achieve or sustain
profitability, among other things, the Company must substantially grow its
customer base, including maintaining existing customer relationships, expand
domestically and internationally, provide scalable, reliable and cost-effective
services, continue to grow its infrastructure to accommodate expanded and new
facilities, additional customers and increased bandwidth use of its network,
expand its channels of distribution, effectively establish its brand name,
retain and motivate qualified personnel and continue to respond to competitive
developments. Failure of the Company's services to achieve widespread market
acceptance would have a material adverse effect on the Company's business,
results of operations and financial condition. Although the Company has
experienced significant growth in revenues in recent periods, the Company does
not believe that this growth rate is necessarily indicative of future operating
results, and there can be no assurance that the Company will ever achieve
profitability on a quarterly or an annual basis or, if achieved, will sustain
profitability.
 
     Need to Grow and Retain Customer Base; Lengthy Sales Cycle. The Company's
success is substantially dependent on the continued growth of its customer base
and the retention of its customers. The Company's ability to attract new
customers will depend on a variety of factors, including the willingness of
businesses to outsource their mission-critical Internet operations, the
reliability and cost-effectiveness of the Company's services and the Company's
ability to effectively market such services. A majority of the Company's
customer contracts are cancelable on 30 days' notice. In the past, the Company
has lost customers to other service providers for various reasons, including as
a result of lower prices and other incentives offered by competitors and not
matched by the Company. Accordingly, there can be no assurance that the
Company's customers will maintain or renew their commitments to use the
Company's services. The Company intends to develop alternative distribution and
lead generation relationships with potential channel partners including hardware
providers, system integrators, value added resellers and Web hosting companies.
Any failure by the Company to develop these relationships could materially and
adversely impact the ability of the Company to generate increased revenues,
which would have a material adverse effect on the Company's business, results of
 
                                        5
15
 
operations and financial condition. In addition, the Company typically
experiences a lengthy sales cycle for its services, resulting, in part, from the
importance to customers of securing Internet connectivity for mission-critical
operations and the need to educate certain customers regarding the benefits of
co-location and Internet connectivity services. Changes in the rate of growth in
the Company's customer base, customer renewal rates and the sales cycle for the
Company's services, have caused, and are expected in the future to cause,
significant fluctuations in the Company's results of operations on a quarterly
and an annual basis. In addition, the Company intends to significantly increase
its sales and marketing expenditures. Due to the typically lengthy sales cycle
for the Company's services, such expenses will occur prior to customer
commitments for the Company's services. There can be no assurance that the
increase in the Company's sales and marketing efforts will result in increased
sales of the Company's services.
 
     Potential Fluctuations in Results of Operations. The Company has
experienced significant fluctuations in its results of operations on a quarterly
and annual basis. The Company expects to continue to experience significant
fluctuations in its future quarterly and annual results of operations due to a
variety of factors, many of which are outside the Company's control, including:
demand for and market acceptance of the Company's services; capacity utilization
of its ISX facilities; fluctuations in data communications and
telecommunications costs; reliable continuity of service and network
availability; customer retention; the timing and success of marketing efforts by
the Company; the timing and magnitude of capital expenditures, including costs
relating to the expansion of operations; the timely expansion of existing
facilities and completion of new facilities; the ability to increase bandwidth
as necessary; fluctuations in bandwidth used by customers; the timing and
magnitude of expenditures for sales and marketing; introductions of new services
or enhancements by the Company and its competitors; the timing of customer
installations and related payments; the ability to maintain or increase peering
relationships; provisions for customer discounts and credits; the introduction
by third parties of new Internet services; increased competition in the
Company's markets; growth of Internet use and establishment of Internet
operations by mainstream enterprises; changes in the pricing policies of the
Company and its competitors; changes in regulatory laws and policies; economic
conditions specific to the Internet industry; and general economic factors. In
addition, a relatively large portion of the Company's expenses are fixed in the
short-term, particularly with respect to data communications and
telecommunications costs, depreciation, real estate, interest and personnel, and
therefore the Company's future results of operations will be particularly
sensitive to fluctuations in revenues. In addition, the Company expects to incur
compensation costs related to certain option grants and warrants, including a
significant charge in the quarter that this offering is consummated.
Furthermore, although the Company has not encountered significant difficulties
in collecting its accounts receivable in the past, many of the Company's
customers are in an emerging stage, and there can be no assurance that the
Company will be able to collect receivables on a timely basis. The Company also
expects that its sales may be affected by seasonality trends with decreased
revenues during the summer months. Due to all of the foregoing factors, the
Company believes that period-to-period comparisons of its results of operations
are not necessarily meaningful and should not be relied upon as indications of
future performance. Furthermore, as a result of the foregoing and other factors,
the Company's results of operations in future periods may fall below the
expectations of securities analysts and investors. In such event, the trading
price of the Company's Common Stock will likely be materially and adversely
affected.
 
     Risks Associated with Recent and Planned Business Expansion. The Company
recently opened its second ISX facility in Vienna, Virginia. The Company is also
planning to develop a second ISX facility in San Jose, California of
approximately 110,000 square feet, including approximately 50,000 square feet of
co-location space. The new facility is targeted to open by the fall of 1999. The
Company intends to initially complete the build-out of approximately 13,000
square feet of co-location space and to complete the build-out of additional
co-location space incrementally over time based on customer demand. The Company
intends to use a significant portion of the net proceeds of this offering to
construct the new San Jose ISX facility. In addition, any build-out of
incremental co-location space at the new facility may require the Company to
obtain additional debt or equity financing. The Company will need to accomplish
a number of objectives in order to successfully complete the development of the
planned ISX facility, on a timely basis or at all, including obtaining necessary
permits and approvals, passing required inspections, and hiring necessary
contractors,
                                        6
16
 
builders, electricians, architects and designers. In addition, the development
of this new facility could place a significant strain on the Company's
management resources and could result in the diversion of management attention
from the day-to-day operation of the Company's business. The successful
development of the facility will require careful management of various risks
associated with significant construction projects, including construction delay,
cost estimation errors or overruns, equipment and material delays or shortages,
inability to obtain necessary permits on a timely basis and other factors, many
of which are beyond the Company's control. There can be no assurance with
respect to the cost, timing or extent of any expansion or that the Company will
be successful in expanding its operations, or developing the ISX facility
planned for San Jose, California, as well as any new ISX facilities that the
Company may want to establish in the future, on a timely basis, or at all. The
Company's inability to establish its planned facility or to effectively manage
its expansion would have a material adverse effect upon the Company's business,
results of operations and financial condition. Furthermore, the Vienna, Virginia
ISX facility and, if completed, the new San Jose ISX facility, will result in
substantial new fixed and operating expenses, including expenses associated with
hiring, training and managing new employees, purchasing new equipment,
implementing power and redundancy systems, implementing multiple data
communication and telecommunication connections, leasing additional real estate
and depreciation. In addition, the Company will need to continue to implement
and improve its operational and financial systems. If revenue levels do not
increase sufficiently to offset these new expenses, the Company's operating
results will be materially adversely impacted in future periods. There can be no
assurance that the Company will accurately anticipate the customer demand for
new facilities or that the Company will attract a sufficient number of
customers.
 
     The Company also intends to make strategic minority investments in joint
ventures and foreign companies that develop ISX facilities in Europe and Asia
and to license its trademarks and technology to such entities. If the Company
makes such investments, the Company will be dependent on these joint ventures
and foreign companies to establish and operate ISX facilities. The ability of
these joint ventures and foreign companies to successfully establish and operate
ISX facilities is subject to a number of risks over which the Company will have
little or no control, as a result of its anticipated minority ownership in such
entities. There can be no assurance that these entities will be able to obtain
the necessary data communications and telecommunications infrastructure in a
cost-effective manner or compete effectively in international markets. In
addition, there can be no assurance that any of these investments, if made, will
result in the establishment of ISX facilities, or that such investment
relationships will not be disrupted. Furthermore, to the extent that such
entities use the AboveNet brand name and do not provide the same level of
performance and service as the Company, their operations could have a material
adverse effect on the Company's reputation and brand equity. Furthermore,
certain foreign governments have enforced laws and regulations related to
content distributed over the Internet that are more restrictive than those
currently in place in the United States. There can be no assurance that one or
more of these factors will not have a material adverse effect on the Company's
global ISX strategy, business, results of operations and financial condition.
 
     Intense Competition. The market served by the Company is intensely
competitive. There are few substantial barriers to entering the co-location
service business, and the Company expects that it will face additional
competition from existing competitors and new market entrants in the future. The
Company believes that participants in this market must grow rapidly and achieve
a significant presence in the market in order to compete effectively. There can
be no assurance that the Company will have the resources or expertise to compete
successfully in the future. In addition, many of the Company's current and
potential competitors have substantially greater financial, technical and
marketing resources, larger customer bases, longer operating histories, greater
name recognition and more established relationships in the industry than the
Company. As a result, certain of these competitors may be able to develop and
expand their network infrastructures and service offerings more quickly, adapt
to new or emerging technologies and changes in customer requirements more
quickly, take advantage of acquisitions and other opportunities more readily,
devote greater resources to the marketing and sale of their services and adopt
more aggressive pricing and incentive policies than can the Company. In an
effort to gain market share, certain of the Company's competitors have offered
co-location services similar to those of the Company at lower prices than those
of the Company or with incentives not
 
                                        7
17
 
matched by the Company, including free start-up and domain name registration,
periods of free service and low-priced Internet access. As a result of these
policies, the Company may encounter increasing pricing pressure which could
result in loss of customers and have a material adverse effect on its business,
results of operations and financial condition.
 
     In addition, certain of the Company's competitors have entered and will
likely continue to enter into joint ventures, consortiums or consolidations to
provide additional services competitive with those provided by the Company. As a
result, such competitors may be able to provide customers with additional
benefits in connection with their co-location and network management solutions,
including reduced communications costs, which could reduce the overall costs of
their services relative to the Company's services. There can be no assurance
that the Company will be able to offset the effects of any such price
reductions. The Company believes that companies seeking co-location and Internet
connectivity providers for their mission-critical Internet operations may use
more than one company to provide this service. As a result, these customers
would be able to more easily shift the amount of service and bandwidth usage
from one provider to another. The Company may also face competition from its
suppliers.
 
     Management of Growth; Dependence on Key Personnel. The Company has recently
experienced a period of rapid growth with respect to the expansion of its ISX
facilities and its customer base. The Company's ability to manage effectively
its recent growth and any future growth will require it to continue to expand
its operating and financial procedures and controls, to replace or upgrade its
operational, financial and management information systems and to attract, train,
motivate, manage and retain key employees. The Company is currently upgrading
its financial and management information systems. There can be no assurance that
the Company will be able to implement such new systems successfully or on a
timely basis. The Company also is dependent upon its ability to increase
substantially the size of its sales and marketing organization. The market for
highly qualified sales and marketing personnel is very competitive. There can be
no assurance that the Company will be successful in meeting its hiring goals or
that any new employees will be successful in expanding the Company's customer
base. The Company's growth has placed, and if it continues, will place, a
significant strain on the Company's financial, management, operational and other
resources. If the Company's management is unable to effectively manage any
further growth that may occur, the Company's business, results of operations and
financial condition would be materially adversely affected. 
 
     The Company has recently hired many key employees and officers, including
its President and Chief Operating Officer, its Senior Vice President of Sales
and Marketing, its Vice President of International-Europe, its Vice President of
Sales, its Vice President of Construction and Real Estate and most recently, its
Chief Financial Officer. As a result, the Company's management team has worked
together for only a brief time. The Company's ability to effectively execute its
strategies will depend in part upon its ability to integrate these and future
managers into its operations. The Company also has plans to hire additional
executive management personnel, including a Vice President of Marketing. If the
Company's executives are unable to manage growth effectively, the Company's
business, results of operations and financial condition could be materially
adversely affected. The Company's success also depends in significant part upon
the continued services of its senior management and key technical and sales
personnel, including the Company's Chief Executive Officer, Sherman Tuan,
President and Chief Operating Officer, Warren J. Kaplan, Chief Technical
Officer, David Rand, and Senior Vice President of Sales and Marketing, David
Dembitz. The Company maintains a key man insurance policy in the amount of
approximately $1.1 million on the life of Mr. Tuan, but does not maintain such
insurance with respect to any other executive officers. Any officer or employee
of the Company can terminate his or her relationship with the Company at any
time. The loss of the services of one or more of the Company's key employees or
the Company's failure to attract additional qualified personnel could have a
material adverse effect on the Company's business, results of operations and
financial condition. 
 
     Risk of System Failure. The Company's operations are dependent upon its
ability to prevent system interruption and protect its network infrastructure
and customers' equipment against damage from human error, fire, earthquakes,
floods, power loss, telecommunications failures, sabotage, intentional acts of
vandalism
                                        8
18
 
and similar events. The Company's existing and planned ISX facilities in San
Jose, California are in an area that is subject to earthquakes and, as a result,
are subject to greater risk of system interruption. Despite precautions taken,
and planned to be taken, by the Company the occurrence of a natural disaster or
other unanticipated problems such as human interference or mistake, unannounced
or unexpected changes in transmission protocols or other technology, could
result in interruptions in the services provided by the Company or significant
damage to customer equipment. In addition, failure of any of the Company's data
communication and telecommunication providers, such as MCI WorldCom, Sprint,
Pacific Bell, Teleport Communications Group, a subsidiary of AT&T, and WinStar
Communications, Inc., to provide the data communication and/or telecommunication
capacity required by the Company, whether as a result of human error, a natural
disaster or other operational disruption, could result in interruptions in the
Company's services. Any damage to or failure of the systems of the Company or
its service providers could result in reductions in, or terminations of,
services supplied to the Company's customers, which could have a material
adverse effect on the Company's business, results of operations and financial
condition. In addition, the Company's reputation could be materially adversely
affected. The Company may be subject to legal claims by its customers for
disruption of service or damage to customer equipment. While the Company's
customer contracts generally purport to eliminate the Company's liability for
consequential or punitive damages or for damage to customer equipment not caused
by the Company's gross negligence or willful acts, there can be no assurance
that the Company would not be held liable for such damages. 
 
     Risks Associated with Emerging Market for Network Management Services;
Uncertainty of Acceptance of Services. The market for co-location and Internet
connectivity services has only recently begun to develop, is evolving rapidly
and likely will be characterized by an increasing number of market entrants.
There is significant uncertainty regarding whether this market ultimately will
prove to be viable or, if it becomes viable, that it will grow. The Company's
future growth, if any, will be dependent on the growth of the Internet as a
global communication and commerce medium, the growth of mission-critical
Internet operations, the willingness of enterprises to co-locate and outsource
Internet connectivity for their mission-critical Internet operations and the
Company's ability to successfully and cost-effectively market its services to a
sufficiently large number of customers. There can be no assurance that the
market for the Company's services will develop, that the Company's services will
be adopted or that businesses, organizations or consumers will significantly
increase use of the Internet for commerce and communication. If this market
fails to develop, or develops more slowly than expected, or if the Company's
services do not achieve widespread market acceptance, the Company's business,
results of operations and financial condition would be materially and adversely
affected. In addition, in order to be successful in this emerging market, the
Company must be able to differentiate itself from its competition through its
service offerings and brand name recognition. There can be no assurance that the
Company will be successful in differentiating itself or achieving widespread
market acceptance of its services, or that it will not experience difficulties
that could delay or prevent the successful development, introduction or
marketing of these services. In addition, there can be no assurance that the
Company's business model of establishing centralized ISX facilities will be
widely adopted over the model established by other outsource providers who have
developed and are continuing to develop numerous geographically disbursed
facilities. In addition, if the Company incurs increased costs or is unable, for
technical or other reasons, to develop and introduce new services or
enhancements of existing services in a timely manner, or if these or other new
services do not achieve widespread market acceptance, the Company's business,
results of operations and financial condition would be materially adversely
affected.
 
     Risks Associated with Network Scalability. The Company must continue to
expand and adapt its network infrastructure as the number of users and the
amount of information they wish to transport increase and to meet changing
customer requirements. Due to the limited deployment of the Company's services
to date, the ability of the Company's network to connect and manage a
substantially larger number of customers at high transmission speeds is as yet
unknown, and the Company faces risks related to the network's ability to be
scaled up to significantly greater customer levels while maintaining a high
level of performance. To the extent customers' usage of bandwidth increases, the
Company will need to make additional investments in its infrastructure to
maintain adequate downstream data transmission speeds, the availability of which
may be limited or the cost of which may be significant. There can be no
assurance that additional network capacity
 
                                       9
19
 
will be available from third-party suppliers when it is needed by the Company.
As a result, there can be no assurance that the Company's network will be able
to achieve or maintain a sufficiently high data transmission capacity. The
Company's failure to achieve or maintain high data transmission capacity could
significantly reduce consumer demand for its services and have a material
adverse effect on its business, results of operations and financial condition.
In addition, as the Company upgrades its telecommunications infrastructure to
increase bandwidth available to its customers, it may encounter equipment or
software incompatibility which may cause delays in implementation. There can be
no assurance that the Company will be able to expand or adapt its
telecommunications infrastructure to meet additional demand or its customers'
changing requirements, on a timely basis and at a commercially reasonable cost,
or at all. 
 
     Need to Maintain and Increase Peering Relationships. The Internet is
comprised of several network providers who operate their own networks and
interconnect their networks at various public and private peering points,
through "peering arrangements" with one another. The Company's establishment and
maintenance of peering relationships is necessary in order to effectively
exchange traffic with ISPs without having to pay the higher costs of transit
services and in order to maintain high network performance levels. These
arrangements are not subject to regulation and are subject to revision in terms,
conditions or costs over time. There is no assurance that ISPs will maintain
peering relationships with the Company. In addition, increasing requirements or
costs may be imposed on the Company in order to maintain peering relationships
with ISPs, particularly national ISPs. Failure to maintain peering relationships
would adversely affect the level of connectivity available to the Company's
customers or cause the Company to incur additional operating expenditures by
paying for transit, either of which could have a material adverse effect on the
Company's business, results of operations and financial condition. In addition,
if these network providers were to increase the pricing associated with
utilizing their networks, the Company may be required to identify alternative
methods through which it can distribute its customers' content. If the Company
were unable to access on a cost-effective basis alternative networks to
distribute its customers' content or pass through any additional costs of
utilizing these networks to its customers, the Company's business, results of
operations and financial condition would be materially adversely affected.
 
     Dependence upon Third Party Suppliers. The Company's success will depend
upon third party network infrastructure providers, including the capacity leased
from its telecommunications network suppliers. In particular, the Company is
dependent on Sprint, MCI WorldCom and certain other data communication and
telecommunication providers for its backbone capacity and is therefore dependent
on such companies to maintain the operational integrity of its backbone. In
addition, any significant increase in data communication or telecommunication
costs could have a material adverse effect on the Company's business, results of
operations and financial condition. MCI WorldCom is a current competitor and the
Company's other data communications providers are potential competitors of the
Company. Furthermore, the Company relies on a number of public and private
peering interconnections to deliver its services. If the carriers that operate
the Internet exchange points were to discontinue their support of the peering
points and no alternative providers emerged, or such alternative providers
increased the cost of utilizing the Internet exchange points, the distribution
of content through the Internet exchange points, including content distributed
by the Company, would be significantly constrained. Furthermore, as traffic
through the Internet exchange points increases, if commensurate increases in
bandwidth are not added, the Company's ability to distribute content rapidly and
reliably through these networks will be materially adversely affected.
 
     The Company relies on other companies to supply certain key components of
its network infrastructure, including networking equipment which, in the
quantities and quality demanded by the Company, are available only from limited
sources. Currently, the Company orders all of its routers from Cisco Systems,
Inc. Although the Company believes that it could procure alternative sources to
supply routers in the event routers from Cisco Systems, Inc. were unavailable,
the Company would need to train its personnel in the use of alternative routers,
which could cause delay or interruption in its services. 
 
     Risks Associated with Potential Future Acquisitions. The Company may in the
future pursue acquisitions of technologies or businesses. Future acquisitions by
the Company may result in the use of significant amounts of cash, potentially
dilutive issuances of equity securities, incurrence of debt, or amortization
expenses related to goodwill and other intangible assets, any of which could
materially adversely affect the
                                       10
20
 
Company's business, results of operations or financial condition. In addition,
acquisitions involve numerous risks, including difficulties in the assimilation
of the operations, technologies, products and personnel of the acquired company,
the diversion of management's attention from other business concerns, risks of
entering markets in which the Company has no or limited direct prior experience,
and the potential loss of key employees of the acquired company. In the event
that any such acquisitions occur, there can be no assurance that the Company's
business, results of operations and financial condition would not be materially
adversely affected.
 
     Dependence on Growth of Internet Use and Internet Infrastructure
Development. The increased use of the Internet for retrieving, sharing and
transferring information among businesses, consumers, suppliers and partners has
only recently begun to develop, and the Company's success will depend in large
part on continued growth in the use of the Internet, which in turn will depend
on a variety of factors including security, reliability, cost, ease of access,
quality of service and necessary increases in bandwidth availability. The
adoption of the Internet for information retrieval and exchange, commerce and
communications, particularly by those enterprises that have historically relied
upon alternative means of commerce and communications, generally will require
the acceptance of a new medium of conducting business and exchanging
information. Demand for and market acceptance of the Internet are subject to a
high level of uncertainty and are dependent on a number of factors, including
growth in consumer access to and acceptance of new interactive technologies, the
development of technologies that facilitate interactive communication between
organizations and targeted audiences and increases in user bandwidth. If the
Internet as a commercial or business medium fails to develop or develops more
slowly than expected, the Company's business, results of operations and
financial condition could be materially adversely affected. The recent growth in
the use of the Internet has caused frequent periods of performance degradation,
requiring the upgrade of routers and switches, telecommunications links and
other components forming the infrastructure of the Internet by ISPs and other
organizations with links to the Internet. Any perceived degradation in the
performance of the Internet as a whole could undermine the benefits of the
Company's services. Potentially increased performance provided by the services
of the Company and others is ultimately limited by and reliant upon the speed
and reliability of the networks operated by third parties. Consequently, the
emergence and growth of the market for the Company's services is dependent on
improvements being made to the entire Internet infrastructure to alleviate
overloading and congestion.
 
     Rapid Technological Change; Evolving Industry Standards. The Company's
future success will depend, in part, on its ability to offer services that
address the increasingly sophisticated and varied needs of its current and
prospective customers and to respond to technological advances and emerging
industry standards and practices on a timely and cost-effective basis.
Mission-critical Internet operations are complex and are characterized by
rapidly changing and unproven technology, evolving industry standards, changes
in customer needs, emerging competition and frequent new service introductions.
There can be no assurance that future advances in technology will be beneficial
to, or compatible with, the Company's business, that the Company will be able to
incorporate such advances on a cost-effective or timely basis into its business
or that such advances will not make the Company's services unnecessary or less
cost-effective than using the new technology. Moreover, technological advances
may have the effect of encouraging certain of the Company's current or future
customers to rely on in-house personnel and equipment to furnish the services
currently provided by the Company. In addition, keeping pace with technological
advances in the Company's industry may require substantial expenditures and lead
time. Although the Company currently intends to support emerging standards,
there can be no assurance that industry standards will be established or, that
if they become established, the Company will be able to conform to these new
standards in a timely fashion and maintain a competitive position in the market.
The failure of the Company to conform to prevailing standards, or the failure of
a common standard to emerge, could have a material adverse effect on the
Company's business, results of operations and financial condition. In addition,
there can be no assurance that products, services or technologies developed by
others will not render the Company's services uncompetitive, unnecessary or
obsolete.
 
     Security Risks. Customer operations at the Company's facilities have in the
past experienced, and may in the future experience, delays or interruptions in
service as a result of the accidental or intentional actions of
 
                                       11
21
 
Internet users, current and former employees or others. Furthermore, such
inappropriate access to the network by third parties could also potentially
jeopardize the security of confidential information, such as credit card and
bank account numbers, stored in the computer systems of the Company and its
customers, which could result in liability to the Company and the loss of
existing customers or the deterrence of potential customers. Although the
Company implements security procedures and systems, such procedures and systems
have been circumvented in the past, and there can be no assurance that
unauthorized access, accidental or intentional actions and other disruptions
will not occur in the future. The Company was recently sued by a customer
alleging that the Company negligently allowed the customer's consultant access
to the customer's servers located at the Company's San Jose facility. The costs
required to minimize security problems could be prohibitively expensive and the
efforts to address such problems could result in interruptions, delays or
cessation of service to the Company's customers, which could have a material
adverse effect on the Company's business, results of operations and financial
condition. Concerns over the security of Internet transactions and the privacy
of users may also inhibit the growth of the Internet, especially as a means of
conducting commercial transactions.
 
     Government Regulations and Legal Uncertainties. There is currently only a
small body of laws and regulations directly applicable to access to or commerce
on the Internet. However, due to the increasing popularity and use of the
Internet, it is possible that a number of laws and regulations may be adopted at
the international, federal, state and local levels with respect to the Internet.
A number of laws and regulations have already been proposed or are currently
being considered by federal, state and foreign legislatures. The nature of any
new laws and regulations and the manner in which existing and new laws and
regulations may be interpreted and enforced cannot be fully determined. The
adoption of any future laws or regulations might decrease the growth of the
Internet, decrease demand for the services of the Company, impose taxes or other
costly technical requirements or otherwise increase the cost of doing business
or in some other manner have a material adverse effect on the Company or its
customers, each of which could have a material adverse effect on the Company's
business, results of operations and financial condition. In addition,
applicability to the Internet of existing laws governing issues such as property
ownership, copyrights and other intellectual property issues, taxation, libel,
obscenity and personal privacy is uncertain. In addition, as the Company's
services are available over the Internet in multiple states and foreign
countries, and as the Company facilitates sales by its customers to end users
located in such states and foreign countries, such jurisdictions may claim that
the Company is required to qualify to do business as a foreign corporation in
each such state or foreign country. Any such new legislation or regulation, or
the application of laws or regulations from jurisdictions whose laws may not
currently apply to the Company's business, could have a material adverse effect
on the Company's business, results of operations and financial condition.
 
     Risks Associated with Information Disseminated through the Company's
Network. The law relating to the liability of online services companies and
Internet access providers for information carried on or disseminated through
their networks is currently unsettled. It is possible that claims could be made
against online services companies, co-location companies and Internet access
providers under both United States and foreign law for defamation, negligence,
copyright or trademark infringement, or other theories based on the nature and
content of the materials disseminated through their networks. The Company has in
the past received, and may in the future receive, letters from recipients of
information transmitted by the Company's customers objecting to the nature and
content of the materials disseminated through the Company's networks. Several
private lawsuits seeking to impose such liability upon online services companies
and Internet access providers are currently pending. In addition, legislation
has been proposed that imposes liability for or prohibits the transmission over
the Internet of certain types of information. The imposition upon the Company
and other Internet network providers of potential liability for information
carried on or disseminated through their systems could require the Company to
implement measures to reduce its exposure to such liability, which may require
the expenditure of substantial resources, or to discontinue certain service
offerings. The increased attention focused upon liability issues as a result of
these lawsuits and legislative proposals could impact the growth of Internet
use. While the Company carries general liability insurance, it may not be
adequate to compensate or may not cover the Company in the event the Company
becomes liable for information carried on or disseminated through its networks.
Any costs not covered by insurance incurred as a result of such liability or
asserted liability could have a material adverse effect on the Company's
business,
                                       12
22
 
results of operations and financial condition. In addition, there can be no
assurance that content distributed by certain of the Company's current or future
customers will not be regulated or banned, which could reduce the Company's
customer base. Certain businesses, organizations and individuals have in the
past sent unsolicited commercial e-mails from servers hosted at the Company's
facilities to massive numbers of people, typically to advertise products or
services. This practice, known as "spamming," can lead to complaints against
service providers that enable such activities, particularly where recipients
view the materials received as offensive. There can be no assurance certain ISPs
and other online services companies would not deny network access to the Company
if undesired content or spamming were to be transmitted from servers hosted by
the Company, which could have a material adverse effect on the Company's
business, results of operations and financial condition.
 
     Limited Protection of Proprietary Technology; Risk of Infringement. The
Company relies on a combination of copyright, trademark, service mark and trade
secret laws and contractual restrictions to establish and protect certain
proprietary rights in its services. The Company has no patented technology that
would preclude or inhibit competitors from entering the Company's market. There
can be no assurance that the steps taken by the Company to protect its
intellectual property will prove sufficient to prevent misappropriation of the
Company's technology or to deter independent third-party development of similar
technologies. The laws of certain foreign countries may not protect the
Company's services or intellectual property rights to the same extent as do the
laws of the U.S. To date, the Company has not been notified that the Company
infringes the proprietary rights of third parties, but there can be no assurance
that third parties will not claim infringement by the Company with respect to
current or future products. Any such claim, whether meritorious or not, could be
time-consuming, result in costly litigation, cause service delays or require the
Company to enter into royalty or licensing agreements. Such royalty or licensing
agreements might not be available on terms acceptable to the Company or at all.
As a result, any such claim could have a material adverse effect upon the
Company's business, results of operations and financial condition.
 
     Uncertain Need and Availability of Additional Funding. The Company expects
to incur significant expenditures as part of its planned expansion, including
increases in sales and marketing expenses and expenditures for new and expanded
co-location facilities. Although the Company believes that, following this
offering, its cash reserves and available borrowings will be adequate to fund
the Company's operations for at least the next 12 months, there can be no
assurance that such sources will be adequate or that additional funds will not
be required either during or after such 12 month period. In addition, any
incremental development of additional co-location space at the planned ISX
facility in San Jose, California will require additional debt or equity
financing. No assurance can be given that additional financing will be available
or that, if available, it will be available on terms favorable to the Company or
its stockholders. If additional funds are raised through the issuance of equity
securities, the percentage ownership of the then current stockholders of the
Company could be significantly diluted and such equity securities may have
rights, preferences or privileges senior to those of the holders of the
Company's Common Stock. If adequate funds are not available to satisfy either
short or long-term capital requirements, the Company may be required to limit
its operations and expansion plans significantly, sell assets, or seek to
refinance outstanding obligations, any of which could have a material adverse
effect on the Company's business, results of operations and financial condition.
 
     Year 2000 Risks. Many currently installed computer systems and software
products are coded to accept only two digit entries in the date code field.
These date code fields will need to distinguish 21st century dates from 20th
century dates. This could result in system failures or miscalculations causing
disruptions of operations including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities. As a result, many companies' software and computer systems may need
to be upgraded or replaced in order to comply with such "Year 2000"
requirements. The Company is in the process of establishing procedures for
evaluating and managing the risks and costs associated with this problem and
believes that its computer systems on a stand-alone basis are currently Year
2000 compliant. There can be no assurance, however, that the Company's computer
systems are Year 2000 compliant. In addition, many of the Company's customers'
and suppliers' Internet operations may be impacted by Year 2000
 
                                       13
23
 
complications. The failure of the Company's customers or suppliers to ensure
that their systems are Year 2000 compliant could have a material adverse effect
on the Company's customers and suppliers resulting in decreased Internet usage
or the delay or inability to obtain necessary data communication and
telecommunication capacity, which in turn could have a material adverse effect
on the Company's business, results of operations and financial condition.
 
     Substantial Influence by Principal Stockholders, Executive Officers and
Directors. The Company's executive officers, directors and greater than 5%
stockholders (and their affiliates), in the aggregate, own approximately 30% of
the Company's outstanding Common Stock. As a result, such persons, acting
together, have the ability to substantially influence all matters submitted to
stockholders of the Company for approval (including the election and removal of
directors and any merger, consolidation or sale of all or substantially all of
the Company's assets) and to control the management and affairs of the Company.
Accordingly, such concentration of ownership may have the effect of delaying,
deferring or preventing a change in control of the Company, impeding a merger,
consolidation, takeover or other business combination involving the Company or
discouraging a potential acquirer from making a tender offer or otherwise
attempting to obtain control of the Company, which in turn could have an adverse
effect on the value of the Company.
 
     Recently Established Trading Market for the Common Stock; Potential
Volatility of Stock Price. The public market for the Common Stock was only
established on December 10, 1998 and there can be no assurance that an active
trading market will develop or be sustained.

     The market price of the shares of Common Stock is likely to be highly
volatile and could be subject to wide fluctuations in response to factors such
as actual or anticipated variations in the Company's results of operations,
announcements of technological innovations, new services introduced by the
Company or its competitors, changes in financial estimates by security analysts,
conditions and trends in the Internet, general market conditions and other
factors. Furthermore, the stock markets, and in particular the Nasdaq National
Market, have experienced extreme price and volume fluctuations that have
particularly affected the market prices of equity securities of many technology
companies and that often have been unrelated or disproportionate to the
operating performance of such companies. The trading prices of many technology
companies' stocks are at or near historical highs and reflect price to earnings
ratios substantially above historical levels. There can be no assurance that
these trading prices and price to earnings ratios will be sustained. These broad
market factors may adversely affect the market price of the Company's Common
Stock. These market fluctuations, as well as general economic, political and
market conditions such as recessions, interest rate changes or international
currency fluctuations, may adversely affect the market price of the Common
Stock. In the past, following periods of volatility in the market price of a
company's securities, class action litigation has often been instituted against
such companies. Such litigation, if instituted, could result in substantial
costs and a diversion of management's attention and resources, which would have
a material adverse effect on the Company's business, results of operations and
financial condition.
 
                                       14
24
 
     Antitakeover Effects of Certain Charter Provisions, Bylaws and Delaware
Law. Certain provisions of the Company's Certificate of Incorporation and Bylaws
may have the effect of making it more difficult for a third party to acquire, or
of discouraging a third party from attempting to acquire, control of the
Company. Pursuant to the terms of the Company's Certificate of Incorporation
which will be effective upon the consummation of this offering, the Board of
Directors has the authority to issue up to 5,000,000 shares of Preferred Stock
and to determine the price, rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by
the Company's stockholders. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future (including, but not limited to,
preferences of the Preferred Stock with respect to the payment of dividends and
upon liquidation, dissolution or winding up). The issuance of Preferred Stock,
while providing desirable flexibility in connection with possible acquisitions
and other corporate purposes, could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of the
Company. The Company has no present plans to issue shares of Preferred Stock. In
addition, certain provisions of the Company's Certificate of Incorporation
eliminate the right of stockholders to act by written consent without a meeting.
Furthermore the Company's Certificate of Incorporation provides for a classified
Board of Directors such that approximately only one-third of the members of the
Board of Directors are elected at each annual meeting of stockholders.
Classified Boards may have the effect of delaying, deferring or discouraging
changes in control of the Company. Further, certain provisions of Delaware law
could delay or make difficult a merger, tender offer or proxy contest involving
the Company. Section 203 of the General Corporation Law of the State of
Delaware, which is applicable to the Company, prohibits certain business
combinations with certain stockholders for a period of three years after they
acquire 15% or more of the outstanding voting stock of a corporation.
 
     Shares Eligible for Future Sale. Sales of substantial amounts of the
Company's Common Stock (including shares issued upon the exercise of outstanding
options and warrants) in the public market after this offering could adversely
affect the market price of the Common Stock. Such sales also might make it more
difficult for the Company to sell equity-related securities in the future at a
time and price that the Company deems appropriate. In addition to the 126,975
shares of Common Stock offered hereby as of the date of this Prospectus, there
are 12,817,680 shares of Common Stock outstanding, of which 7,817,680 are
restricted shares ("Restricted Shares") under the Securities Act of 1933, as
amended (the "Securities Act"). As of such date, approximately 62,500 Restricted
Shares are eligible for sale in the public market and 43,682 Restricted Shares
will be eligible for sale 84 days after such date. 5,187,345 Restricted Shares,
which are subject to lock-up agreements with either the Company or CIBC
Oppenheimer Corp., will be available for sale in the public market 174 days
after such date, and the remaining Restricted Shares will be eligible for sale
from time to time thereafter upon expiration of applicable holding periods under
Rule 144 under the Securities Act. In addition, as of September 30, 1998, there
were outstanding 1,555,756 options and 69,843 warrants to purchase Common Stock.
CIBC Oppenheimer Corp. may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to lock-up
agreements. In addition, the holders of approximately 7,359,131 Restricted
Shares are entitled to certain rights with respect to registration of such
shares for sale in the public market. If such holders sell in the public market,
such sales could have a material adverse effect on the market price of the
Company's Common Stock.
 
     Dilution. The Company has issued options and warrants to acquire Common
Stock at prices significantly below the price per share of $12.9375 as reported
on the Nasdaq National Market on December 15, 1998. To the extent such
outstanding options and warrants are exercised, there will be dilution.
 
                                       15
25

                             REGISTERED STOCKHOLDERS

        The Reoffer Prospectus relates to shares of Common Stock which have been
acquired by certain key employees of the Company, Sherman Tuan and Warren J.
Kaplan, (the "Registered Stockholders"). Mr. Tuan acquired his shares of Common
Stock pursuant to the exercise of options granted under the 1996 Stock Option
Plan. The address of Mr. Tuan is 1927 Wellington Drive, Milpitas, California
95035. Mr. Kaplan acquired his shares of Common Stock pursuant to the Employment
Agreement between the Company and such person dated as of November 10, 1997. The
address of Mr. Kaplan is 14690 Stoneridge Drive, Saratoga, California 95070.

        The following table sets forth certain information with respect to the
Registered Stockholders as of December 15, 1998:
Number of           Number of        Number of    Percentage of  
                      Position    Shares Owned as        Shares to         Shares      Shares Owned   
    Registered          with             of                  be          Owned After       After      
   Stockholder      the Company   December 9, 1998    Offered Hereby      Offering     Offering (1)
Sherman Tuan        Chief             181,875              56,875           125,000          *
                    Executive
                    Officer

   
Warren J. Kaplan    President          72,082              70,082             2,000          * 
                    and Chief
                    Operating
                    Officer
*  less than 1%.

(1) Percentage of ownership is calculated assuming 12,833,305 shares of Common
Stock were outstanding on December 15, 1998.

        Shares of Common Stock covered by this Reoffer Prospectus may be offered
and sold from time to time by the Registered Stockholders through brokers
through the Nasdaq National Market System or otherwise, at the prices prevailing
at the time of such sales. To the Company's knowledge, no specific brokers or
dealers have been designated by the Registered Stockholders nor has any
agreement been entered into in respect of brokerage commissions or for the
exclusive or coordinated sale of any securities which may be offered pursuant to
this Reoffer Prospectus. The Company will pay all expenses of preparing and
reproducing this Reoffer Prospectus, but will not 

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26
receive the proceeds from sales by the Registered Stockholders. On December 15,
1998, the average of the high and low selling prices per share of the Common
Stock as reported on the NASDAQ National Market System was $12.9375.

                              PLAN OF DISTRIBUTION

        The shares of Common Stock covered by this Reoffer Prospectus are being
registered by the Company for the account of the Registered Stockholders. The
Company understands that none of such shares will be offered through
underwriters.

        Shares of Common Stock covered by this Reoffer Prospectus may be offered
and sold from time to time by the Registered Stockholders through the NASDAQ
National Market System, the over-the-counter market, negotiated transactions or
otherwise, at the prices prevailing at the time of such sales, at prices
relating to such prevailing market prices or at prices otherwise negotiated. To
the Company's knowledge, no specific brokers or dealers have been designated by
the Registered Stockholders nor has any agreement been entered into in respect
of brokerage commissions or for the exclusive or coordinated sale of any
securities which may be offered pursuant to this Reoffer Prospectus. The
Registered Stockholders and any broker dealer through whom sales are made by the
Registered Stockholders may be regarded as "underwriters" within the meaning of
the Securities Act although the Registered Stockholders disclaims such status,
and his compensation may be regarded as underwriter's compensation.

        The Company will not receive any of the proceeds from the offering
hereunder. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all selling and other expenses
incurred by the individual Registered Stockholders will be borne by such
Registered Stockholders.

        On December 15, 1998, the average of the high and low selling prices of
the Common Stock, as reported on the NASDAQ National Market System, was $12.9375
per share.

                                       17
27
                       DOCUMENTS INCORPORATED BY REFERENCE

        AboveNet Communications Inc. ("AboveNet") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):

        (b)     AboveNet's prospectus filed with the SEC pursuant to Rule 424(b)
                under the Securities Act of 1933, as amended (the "1933 Act"),
                in connection with Registration Statement No. 333-63141 on Form
                S-1 filed with the SEC on September 10, 1998, the amendment
                filed on October 5, 1998 the amendment filed on October 21,
                1998, the amendment filed on November 6, 1998, the amendment
                filed on November 16, 1998, the amendment filed on December 7,
                1998 and the amendment filed on December 8, 1998, in which there
                are set forth audited financial statements for AboveNet's fiscal
                years ended June 30, 1997 and 1998;

        (c)     AboveNet's Registration Statement No. 0-25063 on Form 8-A filed
                with the SEC on November 16, 1998 under Section 12 of the
                Securities Exchange Act of 1934, as amended (the "1934 Act"),
                together with amendments thereto, in which there is described
                the terms, rights and provisions applicable to AboveNet's
                outstanding Common Stock.

        All reports and definitive proxy or information statements filed under
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall also be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents.

                                 INDEMNIFICATION

        Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. The
Registrant's Bylaws provide for mandatory indemnification of its directors and
officers and permissible indemnification of employees and other agents to the
maximum extent permitted by the Delaware General Corporation Law. The
Registrant's Certificate of Incorporation provides that, pursuant to Delaware
law, its directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty as directors to the Registrant and its stockholders.
This provision in the Certificate of Incorporation does not eliminate the
directors' fiduciary duty, and in appropriate circumstances equitable remedies,
such as injunctive or other forms of non-monetary relief, will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Registrant for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit of
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law.

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28
                                  EXHIBIT INDEX

Exhibit Number      Exhibit

        4           Instrument Defining Rights of Stockholders. Reference is
                    made to AboveNet's Registration Statement No. 0-25063 on
                    Form 8-A, which is incorporated herein by reference
                    under Item 3(d) of this Registration Statement.

        5           Opinion and consent of Gunderson Dettmer Stough
                    Villeneuve Franklin & Hachigian, LLP.

        23.1        Independent Auditors' Consent.

        23.2        Consent of Gunderson Dettmer Stough Villeneuve Franklin
                    & Hachigian, LLP is contained in Exhibit 5.

        24          Power of Attorney. Reference is made to page II-5 of
                    this Registration Statement.

        99.1        Written Compensation Agreement with Sherman Tuan.

        99.2        Written Compensation Agreement with Warren J. Kaplan.