Edgar Filing: ATX COMMUNICATIONS INC

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT [ ] CONFIDENTIAL, FOR USE OF THE
[X] DEFINITIVE PROXY STATEMENT COMMISSION ONLY (AS PERMITTED
[ ] DEFINITIVE ADDITIONAL MATERIALS BY RULE 14a-6(e)(2))
[ ] SOLICITING MATERIAL UNDER RULE 14a-12

ATX COMMUNICATIONS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

(NAME OF PERSON(S) FILING PROXY STATEMENT)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

ATX COMMUNICATIONS, INC.
50 MONUMENT ROAD
BALA CYNWYD, PA 19004

NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 5, 2002

The Annual Meeting of Stockholders of ATX Communications, Inc. (the "Company")
will be held at 10:30 A.M., local time, on November 5, 2002, at The
Waldorf-Astoria, 301 Park Avenue, Norse Suite, 18th Floor, New York, New York,
for the following purposes:

1. To elect three directors to the Board of Directors;

2. To ratify the reappointment by the Board of Directors of Ernst
& Young LLP as independent auditors for the year ending
December 31, 2002; and

3. To transact any other business that may properly be brought
before the meeting or any adjournment or postponement thereof.

Notice of the meeting is being sent to all holders of record of the Company's
Common Stock at the close of business on September 27, 2002. All holders of
record of the Common Stock on September 27, 2002 will be entitled to attend and
vote at the meeting. Any stockholder who does not receive a copy of the proxy
statement may obtain a copy at the meeting or by contacting the Company. A list
of the Stockholders entitled to vote at the meeting will be located at the
Company's offices, 50 Monument Road, Bala Cynwyd, PA 19004, prior to the meeting
and will also be available for inspection at the meeting.

A copy of the Annual Report on Form 10-K/A for the year ended December 31, 2001
is being mailed together with this proxy material.

It is important that your shares be represented at the meeting. Regardless of
whether you plan to attend the meeting, please execute the enclosed proxy and
return it promptly in the accompanying postage-paid envelope. Submitting this
executed proxy will not preclude your right to revoke it and to vote in person
at the meeting.

By order of the Board of Directors,

/s/ Christopher A. Holt

Christopher A. Holt
Secretary

Bala Cynwyd, Pennsylvania
October 4, 2002

ATX COMMUNICATIONS, INC.
50 MONUMENT ROAD
BALA CYNWYD, PA 19004

ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 5, 2002

PROXY STATEMENT

This proxy statement sets forth certain information with respect to the
accompanying proxy proposed to be used at the Annual Meeting of Stockholders of
ATX Communications, Inc. (the "Company") to be held at 10:30 A.M., local time,
on November 5, 2002, at The Waldorf-Astoria, 301 Park Avenue, Norse Suite, 18th
Floor, New York, New York or at any adjournment or postponement thereof (the
"Annual Meeting"), for the purposes set forth in the accompanying Notice of 2002
Annual Meeting of Stockholders. The Board of Directors of the Company is
soliciting the accompanying form of proxy and urges you to sign the proxy, fill
in the date, and return it immediately to the Secretary of the Company. The
prompt cooperation of stockholders is necessary in order to ensure a quorum and
to avoid expenses and delay.

Notice of the meeting is being sent to all holders of record of the Company's
Common Stock as of the close of business on September 27, 2002. On the date of
the Annual Meeting, holders of record of Common Stock will be entitled to vote
on all matters presented to stockholders for a vote. At the close of business on
September 27, 2002, 30,000,054 shares of Common Stock were outstanding and
entitled to vote at the Annual Meeting. Each share of Common Stock is entitled
to one vote. Any stockholder who does not receive a copy of the proxy statement
and accompanying proxy card may obtain a copy at the Annual Meeting or by
contacting the Company. All holders of record of Common Stock on the date of the
Annual Meeting will be entitled to attend and vote at the Annual Meeting.

The accompanying proxy is revocable on written instructions, including a
subsequently received proxy, signed in the same manner as the proxy, and
received by the Secretary of the Company at any time at or before the balloting
on the matter with respect to which such proxy is to be exercised. If you attend
the Annual Meeting you may, if you wish, revoke your proxy by voting in person.
This proxy statement and the accompanying proxy materials are first being mailed
to stockholders on or about October 4, 2002.

All expenses of soliciting proxies on behalf of the Company, including clerical
work, printing and postage, will be paid by the Company. Proxies may be
solicited personally, or by mail, telephone or facsimile, by current and former
directors, officers and other employees of the Company, but the Company will not
pay any compensation for such solicitations. The Company will also reimburse
brokers and other persons holding shares in their names or in the names of
nominees for their expenses for sending material to principals and obtaining
their proxies.

The business of the Company was formerly conducted by CoreComm Limited. On July
1, 2002, the Company completed a recapitalization which significantly reduced
its outstanding debt and preferred stock. As a result of the recapitalization,
ATX Communications, Inc. became the new parent company, and CoreComm Limited
became a wholly owned subsidiary of the Company.

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of September 27, 2002 by (i) each executive
officer and director of the Company, (ii) all directors and executive officers
as a group and (iii) stockholders holding 5% or more of the Common Stock.

AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-----------------------------------------

PRESENTLY
EXERCISABLE
EXECUTIVE OFFICERS, DIRECTORS AND COMPANY OPTIONS AND
PRINCIPAL STOCKHOLDERS (1) STOCK WARRANTS (2) TOTAL PERCENT (3)
---------------------------------- ------- ------------ ----- -----------

George S. Blumenthal 609,487 0 609,487 2.03%
J. Barclay Knapp 1,080,932 0 1,080,932 3.60%
Thomas J. Gravina (4) 3,429,475 328,950 3,758,425 12.39%
Michael A. Peterson 27,764 504,900 532,664 1.75%
Timothy Allen (5) 1,300 105,861 107,161 *
Jeffrey D. Coursen (5) 543 128,316 128,859 *
Christopher A. Holt 0 32,778 32,778 *
Christopher S. Michaels (6) 1,975 62,853 64,828 *
Neil C. Peritz (5) 0 24,521 24,521 *
Ralph H. Booth, II (7) 6,240,000 0 6,240,000 20.80%
Alan J. Patricof 0 16,320 16,320 *
Warren Potash 4,089 16,320 20,409 *

All directors and officers as a group 11,395,565 1,220,819 12,616,384 40.41%
(12 in number)

Michael Karp (8) 10,200,000 0 10,200,000 34.00%
c/o University City
Housing Co.
1062 East Lancaster Ave.
Suite 30B
Rosemont, PA 19010

Booth American Company (7) 6,240,000 0 6,240,000 20.80%
333 West Fort Street, 12th Fl.
Detroit, MI 48226
Debra Buruchian (5) 3,405,880 25,500 3,431,380 11.43%

----------------
* Represents less than one percent

(1) Unless otherwise noted, the business address of each person is c/o ATX
Communications, Inc., 110 East 59th Street, New York, NY 10022.

(2) Includes shares of Common Stock issuable upon the exercise of options and
warrants which are exercisable or become exercisable in the next 60 days.

(3) Includes Common Stock and shares of Common Stock issuable upon the
exercise of options and warrants which are exercisable or become
exercisable in the next 60 days.

(4) Includes 2,469 shares of Common Stock held by Mr. Gravina's minor
children, of which shares Mr. Gravina disclaims beneficial ownership.

(5) The business address of these individuals is c/o ATX Communications, Inc.,
50 Monument Road, Bala Cynwyd, PA 19004.

(6) The business address of Mr. Michaels is c/o ATX Communications, Inc., 4660
S. Hagadorn Road, Suite 320 East Lansing, MI 48823.

(7) Ralph H. Booth, II, our director, is an affiliate of Booth American
Company. Accordingly, Mr. Booth may claim beneficial ownership of all of
the shares held by Booth American Company. Booth American Company is the
record owner of all 6,240,000 shares set forth, opposite Ralph H. Booth,
II's name in the table.

(8) Includes 591,303 shares of Common Stock held by the Florence Karp Trust,
of which shares Mr. Karp disclaims beneficial ownership.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires that the Company's directors and executive officers, and persons
who own more than 10% of a registered class of the Company's equity securities
file with the Securities and Exchange Commission (the "SEC"), and with each
exchange on which the Common Stock trades, initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than 10% beneficial owners are
required by the SEC's regulations to furnish the Company with copies of all
Section 16(a) forms they file.

To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required during the fiscal year ended December 31, 2001, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.

ITEM 1

ELECTION OF DIRECTORS

Pursuant to the Company's Restated Certificate of Incorporation, as amended,
which provides for a classified Board of Directors, the Board of Directors
consists of three classes of directors with overlapping three year terms. One
class of directors is to be elected each year with terms expiring on the third
succeeding annual meeting after such election. The terms of three directors
expire this year. Accordingly, at the Annual Meeting, three directors will be
elected to serve for a three year term and until their successors shall have
been elected and qualified. Unless otherwise indicated on any proxy, the proxy
holders intend to vote the shares it represents for each of the nominees whose
biographical information appears in the section immediately following. Each of
the nominees are now serving as directors of the Company and were previously
elected by the Board of Directors of the Company. The proxies cannot be voted
for a greater number of persons than the number of nominees named.

The election to the Board of Directors of each of the nominees identified in
this Proxy Statement will require the affirmative vote of the holders of a
plurality of the shares of Common Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote. In tabulating the vote,
abstentions from voting and broker non-votes will be disregarded and have no
effect on the outcome of the vote.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE ELECTION TO THE BOARD OF DIRECTORS OF
EACH OF THE NOMINEES IDENTIFIED BELOW

The votes applicable to the shares represented by proxies in the accompanying
form will be cast in favor of the three nominees below. While it is not
anticipated that any of the nominees will be unable to serve, if any should be
unable to serve, the proxy holders reserve the right to substitute any other
person.

The current directors will serve for the terms indicated and until their
successors are duly elected and qualified.

PRESENT DIRECTORS WHO ARE NOMINEES FOR REELECTION

TERM EXPIRES
AT ANNUAL
NAME AGE MEETING IN

Ralph H. Booth, II 48 2002
Thomas J. Gravina 41 2002
Michael A. Peterson 32 2002

CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING

TERM EXPIRES
AT ANNUAL
NAME AGE MEETING IN

George S. Blumenthal 58 2003
Warren Potash 71 2003
J. Barclay Knapp 45 2004
Alan J. Patricof 67 2004

NOMINEES

Ralph H. Booth, II has been a director of the Company since January 2002, and
has been the Chairman and Chief Executive Officer of Booth American Company, a
private investment concern, since 1995. Prior to that time and beginning in
1981, he was the President and Chief Financial Officer for Booth American
Company when it owned and operated both a cable television and a radio
broadcasting division. Mr. Booth is a co-founder of ECE Management
International, LLC and has served as a principal since 1989. Mr. Booth is also a
director of B/G Communications, LLC, B/G Enterprises, LLC, B/G Properties, LLC
and Grupo Clarin, S.A.

Thomas J. Gravina is currently the President and Chief Executive Officer and a
director of the Company. Mr. Gravina was Executive Vice President and Chief
Operating Officer of the Company until January 2002. Mr. Gravina has been
employed by the Company and/or its affiliates since the acquisition by CoreComm
Limited of ATX Telecommunications Services, Inc. in September 2000. Prior to the
acquisition, Mr. Gravina served as Co-Chief Executive Officer and a partner of
ATX Telecommunications Services, Inc., a position he had held since 1987. Mr.
Gravina serves as a director of the Eastern Technology Council and the Junior
Achievement of America.

Michael A. Peterson is currently Executive Vice President -- Chief Operating
Officer, Chief Financial Officer and a director of the Company and had served as
Vice President -- Corporate Development of the Company since June 2000 and,
until that time, had served as Director -- Corporate Development of the Company
since our inception. He has worked for the Company and its related historical
affiliates since 1996. He was also Director -- Corporate Development at NTL
Incorporated ("NTL") from 1996 to 2002. Prior to joining NTL, he was in the
investment banking division at Donaldson, Lufkin & Jenrette, specializing in the
communications industry.

CONTINUING DIRECTORS

Alan J. Patricof has been a director of the Company since March 1998. Mr.
Patricof is Chairman of APAX Partners, formerly known as Patricof & Co.
Ventures, Inc., a venture capital firm he founded in 1969. Mr. Patricof serves
as a director of NTL and Boston Properties, Inc., which are publicly held, and
Johnny Rockets Group, Inc., which is a privately held company.

Warren Potash has been a director of the Company since March 1998. Mr. Potash
retired in 1991 as President and Chief Executive Officer of the Radio
Advertising Bureau, a trade association, a position he held since February 1989.
Prior to that time and beginning in 1986, he was President of New Age
Communications, Inc., a communications consultancy firm. Until his retirement in
1986, Mr. Potash was a Vice President of Capital Cities/ABC Broadcasting, Inc.,
a position he held since 1970. Mr. Potash is also a director of NTL.

George S. Blumenthal is currently Chairman Emeritus of the Company and has been
a director of the Company since March 1998. Mr. Blumenthal was the Chairman of
the Company from March 1998 until January 2002. Mr. Blumenthal was Chairman,
Treasurer and a director of Cellular Communications of Puerto Rico from February
1992 until its sale in 1999 and was its Chief Executive Officer from March 1994
until March 1998. Mr. Blumenthal is also Chairman, Treasurer and a director of
NTL and is a director of Sotheby's Holdings, Inc.

J. Barclay Knapp is currently Chairman of the Company and was the President,
Chief Executive Officer, Chief Financial Officer and a director of the Company
from March 1998 until January 2002. Mr. Knapp had various executive positions
including Executive Vice President, Chief Operating Officer and a director of
Cellular Communications, Inc. ("CCI") from 1982 until its sale in 1996. He is
currently President, Chief Executive Officer and a director of NTL, and a
director of NTL's affiliates. Mr. Knapp was also an executive officer and
director of CCI spinoffs, Cellular Communications of Puerto Rico, Inc. and
Cellular Communications International, Inc. from their inception in February
1992 and July 1991, respectively, and until their sale in 1999 and 1998,
respectively.

In addition to these individuals, the Board of Directors has approved the
expansion of the Board of Directors and the nomination and appointment of three
additional directors to be designated by Michael Karp, which expansion and
appointments are to become effective once the Board of Directors is informed of
the identity of the nominees. Michael Karp is currently the Company's largest
stockholder, and participated in the Company's recapitalization by tendering
notes and preferred stock he held in exchange for shares of Common Stock. Mr.
Karp, together with the Florence Karp Trust, presently holds 34.0% of the Common
Stock. The Board of Directors has not yet been informed of the individuals whom
Mr. Karp intends to nominate. Mr. Karp's right to nominate these directors was
included in the exchange agreement that he entered into with CoreComm Limited
and the Company as part of the Company's recapitalization.

INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES

During calendar 2001, the Board of Directors held eleven meetings (including
regularly scheduled and special meetings). The Board of Directors has an Audit
Committee and a Compensation and Option Committee (the "Compensation
Committee"). Messrs. Booth, Patricof and Potash serve as members of the Audit
Committee and the Compensation Committee. The Audit Committee oversees the
Company's financial reporting process and the Compensation Committee reviews and
makes recommendations regarding annual compensation for Company officers, both
on behalf of the Company's Board of Directors. During calendar year 2001, the
Compensation Committee held no meetings and the Audit Committee held four
meetings. During 2001, no director attended fewer than 75% of the meetings of
the Board of Directors of the Company and committee meetings of which he was a
member. Directors are reimbursed for out-of-pocket expenses incurred in
attending meetings of the Board of Directors and the Committees. Messrs.
Patricof and Potash were each granted options to purchase 48,000 shares of
Common Stock in January 2002. Directors who are not officers are paid a fee of
$250 for each Board meeting and each committee meeting that they attend.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors has the responsibility and the
authority described in its charter attached hereto as Appendix A, which has been
adopted by the Board of Directors. The current members of the Audit Committee
are Messrs. Booth, Patricof and Potash.

The members of the Audit Committee are independent, as defined in Rules 4350(c)
and (d)(2) of the National Association of Securities Dealers, Inc.

AUDIT COMMITTEE REPORT

The Audit Committee has discussed with management the audited financial
statements of the Company for the fiscal year ended December 31, 2001, which are
included in the Form 10-K/A accompanying this proxy statement. The Audit
Committee discussed with the independent auditors the matters required to be
discussed under the Statement on Auditing Standards No. 61, which include, among
other items, matters related to the conduct of the audit of the Company's
financial statements. The Audit Committee also discussed with the independent
auditors their

independence relative to the Company and received and reviewed written
disclosures and the letter from the independent auditors required by the
Independence Standards Board Standard No. 1 (which relates to the auditor's
independence relative to the Company).

Based on the foregoing discussions and review, the Audit Committee recommended
to the Board of Directors that the audited financial statements of the Company
for the fiscal year ended December 31, 2001 be included in the Company's annual
report on Form 10-K/A for filing with the Securities and Exchange Commission
(the "SEC").

THE AUDIT COMMITTEE

Ralph H. Booth, II
Alan J. Patricof
Warren Potash

EXECUTIVE OFFICERS

The following table sets forth certain information concerning the persons who
serve as executive officers of the Company. Executive officers of the Company
are elected annually by the Board of Directors and serve until their successors
are duly elected and qualified.

NAME AGE TITLE
---- --- -----

George S. Blumenthal.................... 58 Chairman Emeritus
J. Barclay Knapp........................ 45 Chairman of the Board
Thomas J. Gravina....................... 41 President, Chief Executive Officer and Director
Michael A. Peterson..................... 32 Executive Vice President - Chief Operating Officer, Chief Financial Officer and
Director

Timothy Allen........................... 38 Senior Vice President - Sales
Jeffrey D. Coursen...................... 40 Senior Vice President - Chief Operating Officer of the Commercial Division
Christopher A. Holt..................... 38 Senior Vice President - Chief Counsel for Legal and External Affairs and
Secretary
Christopher S. Michaels................. 36 Senior Vice President - Chief Technology Officer
Neil C. Peritz.......................... 38 Senior Vice President - Controller and Treasurer

Set forth below is a brief description of the present and past business
experience of each person who serves as an executive officer of the Company but
does not serve as a director.

Timothy Allen is currently the Senior Vice President - Sales of the Company and
was the Vice President of Sales and Marketing of the Company and its historical
affiliates from the date of the acquisition of ATX Telecommunications Services,
Inc. in September 2000 until May 2001. Prior to the acquisition, Mr. Allen
served as Vice President of Sales and Marketing of ATX Telecommunications
Services, Inc. since January 1999 and, until that time, served as Director of
Sales and Marketing since 1988.

Jeffrey D. Coursen is currently the Senior Vice President - Chief Operating
Officer of the Commercial Division of the Company and was the Vice President of
Strategic Development of the Company and its historical affiliates from the date
of the acquisition of the Company in September 2000 until May 2001. Prior to the
acquisition, Mr. Coursen served as Vice President of Strategic Development of
ATX Telecommunications Services, Inc. since January 1999 and, until that time,
served as Director of Strategic Development since 1993.

Christopher A. Holt is currently the Senior Vice President - Chief Counsel for
Legal and External Affairs and Secretary of the Company and was the Vice
President and Assistant General Counsel - Regulatory and Corporate Affairs of
the Company and its historical affiliates from September 1998 until May 2001.
Prior to joining the Company, Mr. Holt was an attorney in the Communications Law
and Litigation groups of Mintz, Levin, Cohn,

Ferris, Glovsky & Popeo from November 1994 until September 1998. Mr. Holt is a
member of the Bars of the District of Columbia, Pennsylvania, the U.S. Supreme
Court, and the U.S. District Court for the District of Columbia, as well as the
Federal Communications Bar Association.

Christopher S. Michaels is currently the Senior Vice President - Chief Technical
Officer of the Company and was the Vice President and Chief Technical Officer of
the Company and its historical affiliates from the date of the acquisition of
Voyager.net in September 2000 until May 2001. Prior to the acquisition, Mr.
Michaels served as Vice President of Technology of Voyager.net since October
1998. For several years prior, Mr. Michaels was the principal of a startup
internet service provider that was acquired by Voyager.net in 1995.

Neil C. Peritz is currently the Senior Vice President - Controller and Treasurer
of the Company and was the Senior Vice President of Finance of the Company and
its historical affiliates from May 2001 until October 2002. Mr. Peritz is a
certified public accountant and served as Chief Financial Officer of ATX
Telecommunications Services, Inc. from May 1999 until its acquisition in
September 2000. Mr. Peritz was previously the Chief Financial Officer of
University City Housing Co. and prior to that was an accountant with BDO Seidman
LLP.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

POLICY

The Compensation Committee of the Board of Directors has the responsibility for
the design and implementation of the Company's executive compensation program.
The Compensation Committee is composed entirely of independent non-employee
directors.

The Company's executive compensation program is designed to be closely linked to
corporate performance. To this end, the Company has developed an overall
compensation strategy that links compensation directly to the achievement of
operational goals, and also ties a portion of an executive's aggregate
compensation to the appreciation in stock price. The overall objective of this
strategy is to attract and retain the best possible executive talent and to
motivate these executives to achieve the goals inherent in the Company's
business strategy, thereby seeking to enhance the Company's profitability and
value.

In furtherance of the Company's incentive-oriented compensation goals,
historically cash compensation such as annual base salary and bonus has
generally been set below levels paid by comparable sized telecommunications
companies and was supplemented by equity-based option grants. However, in part
due to the significant downturn in the financial markets, the elimination of
value associated with stock options generally, as well as the uncertainty and
changes relating to the Company's business in this environment, the Compensation
Committee determined to increase the level of cash compensation paid to several
of its senior executives in order to retain them. In assessing these
compensation levels, the Compensation Committee, which is composed of
independent directors, recognizes the fact that some executives have
participated in the development of the Company's business from its earliest
stages, have preserved significant value in an extremely challenging
environment, and are very important to retain for the future success of our
business.

In determining the annual compensation for the Chief Executive Officer, the
Compensation Committee uses the same criteria as it does for the other named
executives.

STOCK OPTIONS

In December 2001, the Company's Board of Directors adopted, and the Company's
sole stockholder approved, the CoreComm Holdco, Inc. 2001 Stock Option Plan (the
"2001 Option Plan") reserving thereunder shares for issuances to employees and
directors.

The 2001 Option Plan is intended to encourage stock ownership by employees of
the Company and its divisions and subsidiary corporations and other affiliates,
so that they may acquire or increase their proprietary interest in the Company,
and to encourage such employees and directors who are employees to remain in the
employ of the Company or its affiliates and to put forth maximum efforts for the
success of the business. The 2001 Option Plan

provides for grants of options to acquire shares of Common Stock, which options
may be "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). The terms of options
granted pursuant to the 2001 Option Plan, including provisions regarding
vesting, exercisability, exercise price and duration, are generally set by the
Compensation Committee.

In determining individual options grants, the Compensation Committee takes into
consideration the number of options previously granted to that individual, the
amount of time and effort dedicated to the Company during the preceding year and
expected commitment to the Company on a forward-looking basis. The Compensation
Committee also strives to provide each option recipient with an appropriate
incentive to increase stockholder value, taking into consideration their cash
compensation levels.

COMPENSATION DEDUCTION CAP POLICY

The 2001 Option Plan is intended to comply with the requirements regarding
exemption from non-deductibility of compensation derived from stock options in
excess of $1 million under sec. 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). Any compensation realized from the exercise of such stock
options granted at fair market value as of the date of grant thus generally
would be exempt from the deduction limitations under sec. 162(m) of the Code.
The Compensation Committee does retain the ability to make awards that may not
comply with sec. 162(m), whether or not made under the 2001 Option Plan.

THE COMPENSATION AND OPTION COMMITTEE

Ralph H. Booth, II
Alan J. Patricof
Warren Potash

GENERAL

The following table discloses compensation received by the Company's Chief
Executive Officer and the five other most highly paid executive officers for the
years ended December 31, 2001, 2000 and 1999. The titles listed below are the
titles that were held by the individuals in 2001.

SUMMARY COMPENSATION TABLE*

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ --------------
COMMON
NAME AND OTHER ANNUAL STOCK ALL OTHER
PRINCIPAL POSITION SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
IN 2001 YEAR ($) ($) ($) OPTIONS (#)(1) ($)
---------------------- ---- ------ ----- ------------- -------------- ------------

J. Barclay Knapp (2) 2001 104,870 -- -- -- --
President and Chief 2000 121,917 -- -- -- --
Executive and Financial 1999 51,667 -- -- -- --
Officer

George S. Blumenthal (2) 2001 104,870 -- -- -- --
Chairman 2000 121,917 -- -- -- --
1999 51,667 -- -- -- --

Richard J. Lubasch (3) 2001 88,390 100,000 -- 100,000 --
Senior Vice President -- 2000 102,758 -- -- 75,000 --
General Counsel and 1999 39,583 -- -- 30,000 --
Secretary

Thomas J. Gravina (4) 2001 248,077 1,300,000 12,185 (5) -- --
Executive Vice President
and Chief Operating
Officer

Michael A. Peterson (6) 2001 2,400 750,000 -- 225,000 --
Vice President -- 2000 2,400 -- -- 100,000 --
Corporate
Development

Patty J. Flynt (7) 2001 58,700 50,615 -- -- --
Senior Vice President 2000 223,149 117,742 38,161 (8) 150,000 --
and Chief Operating 1999 206,250 100,435 -- 450,001 --
Officer

--------------
* The amounts in the table above represent the amounts directly paid by the
Company to the named executives. In addition, during the fiscal year ended
December 31, 2001, the Company shared resources with NTL related to
corporate activity, including a corporate office and corporate employees.
In conjunction with this arrangement, some employees of NTL provided
management, financial, legal and technical services to the Company. Under
this arrangement, NTL charged the Company the salaries of these employees
and other expenses of the shared resources, such as an office expense. In
2001, 2000 and 1999, NTL charged the Company $325,000, $919,000 and
$2,268,000, respectively, net of the Company's charges to NTL. These
charges are not included in the above table. It is not practicable to
determine the amounts of these expenses that would have been incurred had
the Company operated without these services. However, in the opinion of
the Company's management, the allocated method is reasonable. The named
executives, except for Mr. Gravina, received salaries from NTL and spent
portions of their time providing executive management to us. See the
section of this Proxy Statement entitled "Certain Relationships and
Related Transactions."

(1) Amounts in this column are CoreComm Limited stock option grants. In
December 2001, the CoreComm Limited Board of Directors, in connection with
the Company's recapitalization, accelerated all outstanding options to
acquire shares of CoreComm Limited Common Stock so that all are presently
fully vested and are exercisable into shares of CoreComm Limited common
stock. CoreComm Limited is currently a

wholly owned subsidiary of the Company and has no material assets.

(2) In January 2002, Mr. Blumenthal became Chairman Emeritus and Mr. Knapp
became Chairman.

(3) Effective February 4, 2002, Mr. Lubasch resigned from office as Senior
Vice President -- General Counsel and Secretary.

(4) In January 2002, Mr. Gravina became President and Chief Executive Officer.
Mr. Gravina became Executive Vice President and Chief Operating Officer
effective February 1, 2001, following the resignation of Patty J. Flynt as
Senior Vice President and Chief Operating Officer.

(5) Other annual compensation represents a car allowance.

(6) In January 2002, Mr. Peterson became Executive Vice President -- Chief
Operating Officer and Chief Financial Officer.

(7) Effective February 1, 2001, Ms. Flynt resigned from office as Senior Vice
President and Chief Operating Officer.

(8) Other annual compensation includes reimbursement for relocation expenses
and moving expenses.

OPTION GRANTS TABLE

There were no options to purchase shares of Common Stock granted in 2001.

OPTION EXERCISES AND YEAR-END VALUE TABLE

There were no options to purchase shares of Common Stock outstanding in 2001.

EMPLOYMENT AGREEMENTS

In 2002, the Company and a subsidiary of the Company entered into an employment
agreement with Mr. Gravina providing for his employment as President and Chief
Executive Officer. The agreement provides for a term of three years which may be
extended, unless either party provides at least six months' prior notice of its
intent not to renew the agreement. The agreement provides for compensation
consisting of a base salary of $900,000 and certain fringe and other employee
benefits that are made available to the senior executives of the Company. As
additional incentive compensation, Mr. Gravina is entitled to receive (i) three
quarterly bonus awards of $300,000 for 2002, and quarterly bonus awards of
$225,000 for each calendar year after 2002, both of which are based on the
Company meeting financial targets as set forth in the agreement; (ii) options to
acquire 967,500 shares of Common Stock at an exercise price of $1.00 per share;
and (iii) additional incentives commensurate with his position, performance and
awards to other senior executives.

In 2002, the Company and a subsidiary of the Company entered into an employment
agreement with Mr. Peterson providing for his employment as Executive Vice
President - Chief Operating Officer and Chief Financial Officer. The agreement
provides for a term of three years which may be extended automatically for
unlimited additional one-year periods, unless either party provides at least six
months' prior notice of its intent not to renew the agreement. The agreement
provides for compensation consisting of a base salary of $500,000 and certain
fringe and other employee benefits that are made available to the senior
executives of the Company. As additional incentive compensation, Mr. Peterson is
entitled to receive (i) three quarterly bonus awards of $150,000 for 2002, and
quarterly bonus awards of $112,500 for each calendar year after 2002, both of
which are based on the Company meeting financial targets as set forth in the
agreement; (ii) options to acquire 1,485,000 shares of Common Stock at an
exercise price of $1.00 per share; and (iii) additional incentives commensurate
with his position, performance and awards to other senior executives.

The employment agreements with Messrs. Gravina and Peterson (each an
"Executive") provide that (i) in the event that employment is terminated for any
reason other than death, disability, or "cause" (as defined in their respective
agreements), the Executive is entitled to receive a minimum of one (1) year but
no more than two (2) years bonus and salary payable upon termination and options
scheduled to become vested within two years shall become vested and exercisable;
and (ii) upon a change in control, he will receive an amount equal to base
salary plus his annual incentive award times the number of whole and partial
months remaining on his employment contract (but not less than 24 months)
divided by 12, plus full vesting on his options.

PERFORMANCE GRAPH

The following graph compares the cumulative return on the Common Stock of
CoreComm Limited with The Nasdaq Stock Market (U.S.) Composite Index (the
"Nasdaq Composite Index"), the Nasdaq Telecommunications Index Stocks (the
"Telecom Index") and the Peer Group Index. In the Company's view, the Peer Group
Index, which includes Allegiance Telecom, Inc., US LEC Corp., CTC Communications
Group, Inc., Focal Communications Corporation, Choice One Communications Inc.
and ITC Deltacom, Inc., provides a better representation of the performance of
telecommunications companies over the required period than the broader based
Telecom Index. This graph is not deemed to be "soliciting material" or to be
"filed" with the SEC or subject to the SEC's proxy rules or to the liabilities
of Section 18 of the Exchange Act, and the graph shall not be deemed to be
incorporated by reference into any prior or subsequent filing by the Company
under the Securities Act of 1933 or the Exchange Act.

The graph assumes that $100 was invested on September 2, 1998 in each of the
Common Stock of CoreComm Limited, the Telecom Index, the Peer Group Index and
the Nasdaq Composite Index. September 2, 1998 is the date on which the Common
Stock of CoreComm Limited (the Company's predecessor) began trading; the Common
Stock of the Company began trading on July 2, 2002.

COMPARISON OF CORECOMM LIMITED,
THE TELECOM INDEX, THE PEER GROUP INDEX AND THE NASDAQ
COMPOSITE INDEX PERFORMANCE CHART

[PERFORMANCE GRAPH]

NASDAQ COMPOSITE CORECOMM
INDEX TELECOM INDEX LIMITED PEER

02-Sep-98 100.00 100.00 100.00 100.00
31-Dec-98 137.66 143.13 69.04 113.30
30-Jun-99 168.64 187.19 211.44 305.25
31-Dec-99 255.47 290.14 390.36 422.08
30-Jun-00 248.99 248.61 192.33 403.68
31-Dec-00 155.10 132.42 48.85 97.75
30-Jun-01 135.68 89.04 1.87 64.00
30-Dec-01 122.45 67.61 1.58 52.32
30-Jun-02 91.86 29.59 0.39 15.22

NOTE: Stock price performance shown above for the Common Stock is historical and
not necessarily indicative of future price performance.

Since August 16, 2002, the Common Stock of the Company has traded on the OTC
Bulletin Board (OTCBB), under the symbol COMM. On May 16, 2002, Nasdaq provided
CoreComm Limited with notice of a Nasdaq Staff Determination indicating that
CoreComm Limited Common Stock was subject to delisting from the Nasdaq National
Market because CoreComm Limited did not comply with the minimum bid price and
the minimum market value of publicly held shares requirements for continued
listing. On June 28, 2002, a hearing was held before a Nasdaq Listing
Qualifications Panel to review the Nasdaq Staff Determination. In connection
with the Company's recapitalization, on July 2, 2002, Nasdaq transferred
CoreComm Limited's listing on the Nasdaq National Market to the Company. On
August 15, 2002, the Nasdaq Listing Qualifications Panel issued its decision to
delist the Common Stock. The Company has requested a review of this decision by
the Nasdaq Listing and Hearing Review Council.

ITEM 2
RATIFICATION OF REAPPOINTMENT OF INDEPENDENT AUDITORS

Subject to ratification by the stockholders, the Board of Directors has
reappointed Ernst & Young LLP as independent auditors to audit the financial
statements of the Company for the year ending December 31, 2002. The Board of
Directors, pursuant to a recommendation from the Audit Committee, has considered
the provision of services from Ernst & Young LLP to be compatible with
maintaining Ernst & Young LLP's independence relative to the Company.

Representatives of the firm of Ernst & Young LLP are expected to be present at
the Annual Meeting, will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.

AUDIT FEES

The aggregate fees billed to the Company's predecessor for professional services
rendered by Ernst & Young LLP in connection with the audit of the annual
financial statements for the year ended December 31, 2001 included in the Form
10-K of the Company's predecessor and the review of the interim financial
statements included in the Company's predecessor's quarterly reports on Form
10-Q for the same year were $350,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

There were no fees billed to the Company's predecessor for professional services
rendered by Ernst & Young LLP for the year ended December 31, 2001 relating to
financial systems design and implementation.

ALL OTHER FEES

The aggregate fees for all other services rendered by Ernst & Young LLP for the
year ended December 31, 2001 fiscal year were approximately $693,600, which
includes tax planning and the preparation of tax returns and other SEC filings.

RATIFICATION OF REAPPOINTMENT

The ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 2002 will require the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock present at the Annual Meeting, in person or represented by proxy,
and entitled to vote. In determining whether the proposal has received the
requisite number of affirmative votes, abstentions will be counted and will have
the same effect as a vote against the proposal; broker non-votes will be
disregarded and will have no effect on the outcome of the vote.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
SUCH RATIFICATION

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Some of the officers and directors of the Company are also officers or directors
of NTL. In April 2001 the Company issued to NTL $15 million aggregate principal
amount of 10.75% Unsecured Convertible PIK Notes Due April 2011. At June 30,
2002 and December 31, 2001, the total amount of the notes outstanding, less the
unamortized discount of $347,000 and $367,000, respectively, was $16,696,000 and
$15,807,000, respectively.

NTL provided the Company with management, financial, legal and technical
services, and continues to provide access to office space and equipment and use
of supplies. Amounts charged to the Company by NTL consisted of salaries and
direct costs allocated to the Company where identifiable, and a percentage of
the portion of NTL's corporate overhead, which cannot be specifically allocated
to NTL. It is not practicable to determine the amounts of these expenses that
would have been incurred had the Company operated as an unaffiliated entity. In
the opinion of management, this allocation method is reasonable. These methods
are currently being reviewed and it is expected that the charges for these
services provided by NTL will be reduced following such review. NTL charged the
Company $88,000 and $136,000 for the three months ended June 30, 2002 and 2001,
respectively, and $172,000 and $240,000 for the six months ended June 30, 2002
and 2001, respectively, which are included in corporate expenses.

Until the third quarter of 2001, CoreComm Limited provided NTL with access to
office space and equipment and the use of supplies for which it charged NTL a
percentage of the its total rent and supplies expense. It is not practicable to
determine the amounts of these expenses that would have been incurred had
CoreComm Limited operated as an unaffiliated entity. In the opinion of
management, this allocation method was reasonable. CoreComm Limited charged NTL
$40,000 and $107,000 for the three and six months ended June 30, 2001,
respectively, which reduced corporate expenses.

A subsidiary of the Company provides billing and software development services
to subsidiaries of NTL. The Company charges an amount in excess of its costs to
provide these services. General and administrative expenses were reduced
$254,000 and $332,000 for the three months ended June 30, 2002 and 2001,
respectively, and $566,000 and $799,000 for the six months ended June 30, 2002
and 2001, respectively, as a result of these charges.

In 2001, CoreComm Limited and NTL entered into a license agreement whereby NTL
was granted an exclusive, irrevocable, perpetual license to certain billing
software developed by CoreComm Limited for telephony rating, digital television
events rating, fraud management and other tasks. The sales price was cash of
$12.8 million. The billing software was being used by NTL at the time of this
agreement, and was being maintained and modified by the Company under an ongoing
software maintenance and development outsourcing arrangement between the
companies. CoreComm Limited recorded the aggregate $12.8 million as deferred
revenue, to be recognized over three years, of which $1,069,000 and $2,137,000
was recognized by the Company during the three and six months ended June 30,
2002, respectively.

The Company leases office space from entities controlled by an individual who
beneficially owns 34% of the outstanding shares of Common Stock. Rent expense
for these leases was approximately $450,000 and $400,000 for the three months
ended June 30, 2002 and 2001, respectively and approximately $900,000 and
$800,000 for the six months ended June 30, 2002 and 2001, respectively.

STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING

The Company expects to hold its 2003 annual meeting of stockholders more than 30
days from November 5, 2003. The Company will provide stockholders with notice of
the deadline for the submission of proposals at our principal executive offices
intended to be presented at the 2003 annual meeting pursuant to Rule 14a-8 under
the Exchange Act a reasonable time before the Company begins to print and mail
its proxy materials for the 2003 annual meeting of stockholders in order to
allow such stockholders an opportunity to make proposals in accordance with the
rules and regulations of the SEC. The proposals must otherwise comply with the
requirements of Rule 14a-8 in order to be considered for inclusion in the 2003
proxy statement and proxy. The Company expects to provide the notice of the
deadline for the submission of stockholder proposals for the 2003 annual meeting
in the Form 10-Q to be filed by the Company with the SEC for the quarter ended
September 30, 2002. A proposal, including any accompanying supporting statement,
may not exceed 500 words. The rules of the SEC set forth standards for the
exclusion of some stockholder proposals from a proxy statement for an annual
meeting.

OTHER BUSINESS

The Board of Directors is not aware of any matters other than those set forth in
this proxy statement that will be presented for action at the Annual Meeting and
does not intend to bring any other matters before the Annual Meeting. However,
if any other matters should properly come before the Annual Meeting, or at any
adjournment or postponement thereof, it is the intention of the persons named in
the accompanying proxy to vote on such matters as they, in their discretion, may
determine.

By order of the Board of Directors,

/s/ Christopher A. Holt

Christopher A. Holt
Secretary

Bala Cynwyd, Pennsylvania
October 4, 2002

APPENDIX A

CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF
ATX COMMUNICATIONS, INC.

I. AUTHORITY

The Audit Committee (the "Committee") of the Board of Directors (the "Board") of
ATX Communications, Inc. (the "Company") is established pursuant to Article III,
Section 9 of the Company's Bylaws. The Committee shall be comprised of three or
more directors as determined from time to time by resolution of the Board.
Consistent with the appointment of other Board committees, the members of the
Committee shall be elected by the Board at the annual organizational meeting of
the Board or at other time as may be determined by the Board. The Chairman of
the Committee shall be designated by the Board, provided that if the Board does
not so designate a Chairman, the members of the Committee, by majority vote, may
designate a Chairman. The presence in person or by telephone of a majority of
the Committee's members shall constitute a quorum for any meeting of the
Committee. All actions of the Committee will require the vote of a majority of
its members present at a meeting of the Committee at which a quorum is present.

II. PURPOSE OF THE COMMITTEE

The Committee's purpose is to provide assistance to the Board in fulfilling its
legal and fiduciary obligations with respect to matters involving the
accounting, auditing, financial reporting, internal control functions of the
Company and its subsidiaries.

The Committee shall oversee the audit efforts of the Company's independent
auditors and internal auditors and, in that regard, shall take such actions as
it may deem necessary to satisfy itself that the Company's auditors are
independent of management. It is the objective of the Committee to maintain free
and open means of communications among the Board, the independent auditors, the
internal auditors and the financial and senior management of the Company.

III. COMPOSITION OF THE COMMITTEE

(a) Each member of the Committee shall be an "independent" director
within the meaning of the Nasdaq rules and, as such, shall be free
from any relationship that may interfere with the exercise of his or
her judgment as a member of the Committee. Notwithstanding the
foregoing, as permitted by the rules of Nasdaq, under exceptional and
limited circumstances, one director who does not meet certain of the
criteria for "independence" may be appointed to the Committee if the
Board determines in its business judgment that membership on the
Committee by such person is required by the best interests of the
Company and its stockholders and the Company discloses in the annual
proxy statement the nature of such person's relationship and the
reasons for the Board's determination. Current employees or officers,
or their immediate family members, however, are not able to serve on
the audit committee under this exception.

(b) All members of the Committee shall be financially literate at the
time of their election to the Committee or shall become financially
literate within a reasonable period of time after their appointment
to the Committee. "Financial Literacy" shall be determined by the
Board in the exercise of its business judgment, and shall include an
ability to read and understand fundamental financial statements.
Committee members, if they or the Board deem it appropriate, may
enhance their understanding of finance and accounting by
participating in educational programs conducted by the Company or an
outside consultant or firm.

(c) At least one member of the Committee shall have accounting or related
financial management expertise, as such qualification may be
determined in the business judgment of the Board. This requirement
shall be deemed satisfied by past employment experience in finance or
accounting, requisite professional certification in accounting, or
any other comparable experience or background which results in the
individual's financial sophistication, including being or having been
a chief executive officer, chief financial officer or other senior
officer with financial oversight responsibilities.

IV. MEETINGS OF THE COMMITTEE

The Committee shall meet with such frequency and at such intervals as it shall
determine is necessary to carry out its duties and responsibilities. As part of
its purpose to foster open communications, the Committee shall meet at least
annually with management, the head of the internal auditing department and the
Company's independent auditors in separate executive sessions to discuss any
matters that the Committee or each of these groups or persons believe should be
discussed privately. In addition, the Committee (or the Chairman) should meet or
confer with the independent auditors and management quarterly to review the
Company's periodic financial statements prior to their filing with the
Securities and Exchange Commission ("SEC"). The Chairman should work with the
Chief Financial Officer and management to establish the agendas for Committee
meetings. The Committee, in its discretion, may ask members of management or
others to attend its meetings (or portions thereof) and to provide pertinent
information as necessary. The Committee shall maintain minutes of its meetings
and records relating to those meetings and the Committee's activities and
provide copies of such minutes to the Board.

V. DUTIES AND RESPONSIBILITIES OF THE COMMITTEE

In carrying out its duties and responsibilities, the Committee's policies and
procedures should remain flexible, so that it may be in a position to best react
or respond to changing circumstances or conditions. The Committee should review
and reassess annually the adequacy of the Committee's charter. As required by
Nasdaq rules, the charter must specify: (1) the scope of the Committee's
responsibilities and how it carries out those responsibilities, (2) the ultimate
accountability of the Company's independent auditors to the Board and the
Committee, (3) the responsibility of the Committee and the Board for selection,
evaluation and replacement of the Company's independent auditors, and (4) that
the Committee is responsible for ensuring that the Company's independent
auditors submit on a periodic basis to the Committee a formal written statement
delineating all relationships between the independent auditors and the Company
and that the Committee is responsible for actively engaging in a dialogue with
the independent auditors and for recommending that the Board take appropriate
action to ensure the independence of the independent auditors.

While there is no "blueprint" to be followed by the Committee in carrying out
its duties and responsibilities, the following should be considered within the
authority of the Committee:

Selection and Evaluation of Independent Auditors

(a) Make recommendations to the Board as to the selection of the firm of
independent public accountants to audit the books and accounts of the
Company and its subsidiaries for each fiscal year;

(b) Review and approve the Company's independent auditors' annual engagement
letter, including the proposed fees contained therein;

(c) Review the performance of the Company's independent auditors and make
recommendations to the Board regarding the replacement or termination of
the independent auditors when circumstances warrant;

(d) Oversee the independence of the Company's independent auditors by, among
other things:

(i) requiring the independent auditors to deliver to the Committee on a
periodic basis a formal written statement, consistent with
Independence Standards Board Standard No. 1, delineating all
relationships between the independent auditors and the Company; and

(ii) actively engaging in a dialogue with the independent auditors with
respect to any disclosed relationships or services that may impact
the objectivity and independence of the independent auditors and
recommending that the Board take appropriate action to satisfy
itself of the auditors' independence.

(e) Instruct the Company's independent auditors that they are ultimately
accountable to the Committee and the Board, and that the Committee and the
Board are responsible for the selection (subject to Stockholder approval
if determined by the Board), evaluation and termination of the Company's
independent auditors.

Oversight of Annual Audit and Quarterly Reviews

(f) Review and accept, if appropriate, the annual audit plan of the Company's
independent auditors, including the scope of audit activities, and monitor
such plan's progress and results during the year;

(g) Confirm through private discussions with the Company's independent
auditors and the Company's management that no management restrictions are
being placed on the scope of the independent auditor's work;

(h) Review the results of the year-end audit of the Company, including (as
applicable):

(i) the audit report, the published financial statements, the management
representation letter, the "Memorandum Regarding Accounting
Procedures and Internal Control" or similar memorandum

prepared by the Company's independent auditors, any other pertinent
reports and management's responses concerning such memorandum;

(ii) the qualitative judgments of the independent auditors about the
appropriateness, not just the acceptability, of accounting
principles and financial disclosure practices used or proposed to be
adopted by the Company and, particularly, about the degree of
aggressiveness or conservatism of its accounting principles and
underlying estimates;

(iii) the methods used to account for significant unusual transactions;

(iv) the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance
or consensus;

(v) management's process for formulating sensitive accounting estimates
and the reasonableness of these estimates;

(vi) significant recorded and unrecorded audit adjustments;

(vii) any material accounting issues among management, the Company's
internal auditing department and the independent auditors; and

(viii) other matters required to be communicated to the Committee under
generally accepted auditing standards, as amended, by the
independent auditors;

(i) Review with management and the Company's independent auditors such
accounting policies (and changes therein) of the Company, including any
financial reporting issues which could have a material impact on the
Company's financial statements, as are deemed appropriate for review by
the Committee prior to any interim or year-end filings with the SEC or
other regulatory body;

(j) Confirm that the Company's interim financial statements included in
Quarterly Reports on Form 10-Q have been reviewed by the Company's
independent auditors;

Oversight of Financial Reporting Process and Internal Controls

(k) Review the adequacy and effectiveness of the Company's accounting and
internal control policies and procedures through inquiry and discussions
with the Company's independent auditors and management of the Company;

(l) Review with management the Company's administrative, operational and
accounting internal controls, including controls and security of the
computerized information systems, and evaluate whether the Company is
operating in accordance with its prescribed policies, procedures and codes
of conduct;

(m) Review with management and the independent auditors any reportable
conditions and material weaknesses, as defined by the American Institute
of Certified Public Accountants, affecting internal control;

(n) Receive periodic reports from the Company's independent auditors and
management of the Company to assess the impact on the Company of
significant accounting or financial reporting developments proposed by the
Financial Accounting Standards Board or the SEC or other regulatory body,
or any other significant accounting or financial reporting related matters
that may have a bearing on the Company;

(o) Establish and maintain free and open means of communication between and
among the Board, the Company's independent auditors, the Company's
internal auditing department and management;

Other Matters

(p) Meet annually with the general counsel, and outside counsel when
appropriate, to review legal and regulatory matters, including any matters
that may have a material impact on the financial statements of the
Company;

(q) Prepare a report to be included in each annual proxy statement (or, if not
previously provided during the fiscal year, any other proxy statement or
consent statement relating to the election of directors) of the Company
commencing after December 15, 2000 which states, among other things,
whether:

(i) the Committee has reviewed and discussed with management the audited
financial statements to be included in the Company's Annual Report
on Form 10-K;

(ii) the Committee has discussed with the Company's independent auditors
the matters that the auditors are required to discuss with the
Committee by ABS Statement on Auditing Standard No. 61, as it may be
modified or supplemented;

(iii) the Committee has received the written disclosures and the letter
from the Company's independent auditors required by Independence
Standards Board Standard No. 1, as may be modified or supplemented,
and has discussed with the independent auditors their independence;
and

(iv) based on the review and discussions described in subsections (i),
(ii) and (iii) above, the Committee has recommended to the Board
that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the last fiscal year for filing with
the SEC;

(r) Obtain from the independent auditors assurance that Section 10A of the
Private Securities Litigation Reform Act of 1995 has not been implicated;

(s) Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities, including retaining outside counsel
or other consultants or experts for this purpose; and

(t) Perform such additional activities, and consider such other matters,
within the scope of its responsibilities, as the Committee or the Board
deems necessary or appropriate.

With respect to the duties and responsibilities listed above, the Committee
should:

(1) Report regularly to the Board on its activities, as appropriate;

(2) Exercise reasonable diligence in gathering and considering all material
information;

(3) Understand and weigh alternative courses of conduct that may be available;

(4) Focus on weighing the benefit versus the harm to the Company and its
Stockholders when considering alternative recommendations or courses of
action;

(5) If the Committee deems it appropriate, secure independent expert advice
and understand the expert's findings and the basis for such findings,
including retaining independent counsel, accountants or others to assist
the Committee in fulfilling its duties and responsibilities; and

(6) Provide management, the Company's independent auditors and internal
auditors with appropriate opportunities to meet privately with the
Committee.

* * *

While the Committee has the duties and responsibilities set forth in this
charter, the Committee is not responsible for planning or conducting the audit
or for determining whether the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
Similarly, it is not the responsibility of the Committee to resolve
disagreements, if any, between management and the independent auditors or to
ensure that the Company complies with all laws and regulations.

* * *

PROXY
ATX COMMUNICATIONS, INC.
50 MONUMENT ROAD, BALA CYNWYD, PA 19004
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING ON
NOVEMBER 5, 2002

The undersigned hereby appoints Thomas J. Gravina and Michael A. Peterson,
and each of them, with full power of substitution, proxies to represent the
undersigned at the Annual Meeting of Stockholders of ATX Communications, Inc.
(the "Company") to be held on November 5, 2002 at 10:30 a.m., local time, at The
Waldorf-Astoria, 301 Park Avenue, Norse Suite, 18th Floor, New York, New York,
and at any adjournment or postponement thereof and thereat to vote all of the
shares of Common Stock which the undersigned would be entitled to vote, with all
the powers the undersigned would possess if personally present.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Unless otherwise specified in the boxes provided below, this Proxy will be voted
FOR the nominees for Director, FOR the ratification of Ernst & Young LLP as
independent auditors for the Company for the year ending December 31, 2002 and,
in the discretion of the above named persons, as to any other matter that may
properly come before the Annual Meeting.

1. Election of Directors: Nominees: Ralph H. Booth, II, Thomas J. Gravina and Michael A. Peterson
[ ] VOTE FOR all nominees listed, except as marked to [ ] VOTE WITHHELD
the contrary above. (TO WITHHOLD YOUR VOTE FOR ANY
INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST ABOVE.)

2. Ratify the reappointment of Ernst & Young LLP as the independent auditors of
the Company for the year ending December 31, 2002.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. In the discretion of the persons named above, to act upon such other business
as may properly come before the Annual Meeting or any adjournment or
postponement thereof.

(Please date and sign on reverse side and return promptly.)

THE PROXY HOLDERS WILL VOTE THE SHARES REPRESENTED BY THIS PROXY IN THE MANNER
INDICATED ON THE REVERSE SIDE HEREOF. UNLESS A CONTRARY DIRECTION IS INDICATED,
THE PROXY HOLDERS WILL VOTE SUCH SHARES "FOR" ALL NOMINEES FOR DIRECTOR AND A
VOTE "FOR" PROPOSAL 2 SET FORTH ON THE REVERSE SIDE HEREOF. IF ANY FURTHER
MATTERS PROPERLY COME BEFORE THE ANNUAL MEETING, IT IS THE INTENTION OF THE
PERSONS NAMED ABOVE TO VOTE SUCH PROXIES IN ACCORDANCE WITH THEIR BEST JUDGMENT.

--------------------------------
Signature

Dated: 2002
---------------------

In case of joint owners, each
joint owner must sign. If
signing for a corporation or
partnership or an agent,
attorney or fiduciary, indicate
the capacity in which you are
signing.

PLEASE MARK, DATE AND SIGN YOUR NAME AS IT APPEARS
ON THIS CARD AND RETURN IN THE ENCLOSED ENVELOPE