Guaranty

Citizens Utilities Company

by Electric Lightwave
February 19th, 1998

                                                                 Exhibit 10.12

                                                        

                           CITIZENS UTILITIES COMPANY
                                 High Ridge Park
                           Stamford, Connecticut 06905






                                        December 1, 1997





Electric Lightwave Inc.
8100 N.E. Parkway Drive
Suite 150
Vancouver, WA 98662


                    Re: Guaranty Fees

Dear Sir/Madam:

         Reference  is made to the  Guaranty  Agreement  of  Citizens  Utilities
Company ("Citizens") in favor of Shawmut Bank Connecticut,  National Association
("Shawmut"), BA Leasing & Capital Corporation ("BA") and the other Beneficiaries
named therein, dated as of April 28, 1995, pursuant to which Citizens has agreed
to guaranty  certain  obligations of Electric  Lightwave,  Inc. (the  "Company")
under the Participation Agreement between the Company,  Shawmut, the Certificate
Purchasers named therein, the Lenders named therein, BA an Citizens, dated as of
April 28,  1995  (the  "Participation  Agreement"),  and the  related  operating
documents.  For value  received,  the Company  hereby  agrees to pay  Citizens a
guarantee  fee at a rate of  3.25%  per  annum  of the  amount  of the  lessor's
investment in the leased assets.

         Reference is made to the Bank Credit Agreement dated as of November 21,
1997 among the Company,  Citizens, the Lenders named therein and Citibank,  N.A.
(the "Bank Credit  Agreement"),  pursuant to which Citizens,  indirectly through
certain  subsidiaries  and, after  regulatory  authorization  has been obtained,
directly,  has agreed to  guaranty  obligations  of the  Company  under the Bank
Credit Agreement.  For value received, the Company hereby agrees to pay Citizens
a guarantee fee at a rate of 3.25% per annum based on the balance outstanding of
the Company under the Bank Credit Agreement.

         In the event that Citizens  intends to reduce its economic  interest in
the Company to less than 51%,  Citizens  will be entitled to request the Company
to refinance  its  obligations  under the  Participation  Agreement and the Bank
Credit  Agreement  and the Company shall be obligated to use its best efforts to
do so. This refinancing  would occur when Citizens reduces its economic interest
in the Company to less than 51%.

         If you are in agreement with all of the above, please sign in the space
below.

                                        Very truly yours,

                                        CITIZENS UTILITIES COMPANY


                                        By: /s/ Robert J. DeSantis
                                          -------------------------
                                        Name:  Robert J. DeSantis
                                        Title: Vice President and Treasurer
Agreed and Accepted:

Dated: December 1, 1997

ELECTRIC LIGHTWAVE, INC .


By:/s/  David B. Sharkey
  -----------------------
 Name:  David B. Sharkey 
 Title: President