KMC TELECOM HOLDINGS INC
EXHIBIT 10.3
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>a-621864.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>

                                                                    EXHIBIT 10.3

               CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED
                  BASED ON A REQUEST FOR CONFIDENTIAL TREATMENT

                   OMITTED PORTIONS HAVE BEEN SEPARATELY FILED
                   WITH THE SECURITIES AND EXCHANGE COMMISSION

                                                               EXECUTION VERSION

                                 AMENDMENT NO. 3
                                       TO
                      MEDIA GATEWAY SERVICES AGREEMENT III

     THIS AMENDMENT NO 3. TO MEDIA GATEWAY SERVICES  AGREEMENT III ("AMENDMENT")
dated as of March 1, 2001, is by and among Qwest Communications  Corporation,  a
Delaware  corporation  ("QCC"),  Qwest  Communications   International  Inc.,  a
Delaware  corporation  ("QCI")  ("QCC" and "QCI" being  collectively  defined as
"Qwest") and KMC Telecom VI Inc., a Delaware corporation ("KMC").

     WHEREAS,  Qwest and KMC are parties to that certain Media Gateway  Services
Agreement  III,  dated as of June 30,  2000 and as amended by  Amendment  No. 1,
dated as of August 31,  2000 and  Amendment  No. 2, dated as of November 1, 2000
(as so amended by Amendments No. 1 and No. 2 or otherwise  amended,  modified or
supplemented  from time to time, the "MGS AGREEMENT")  pursuant to which,  among
other  things,  KMC has  agreed to  provide  to Qwest,  and Qwest has  agreed to
compensate KMC for, certain services; and

     WHEREAS,  the  parties  have  agreed  to  amend  the MGS  Agreement  on the
following terms;


     NOW,  THEREFORE,  in consideration of the premises set forth above, and for
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, KMC and Qwest agree as follows:

     1.  DEFINITIONS.  Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the MGS Agreement.

     2.  AMENDMENT  TO THE MGS  AGREEMENT.  Effective as of the date first above
written and subject to the  execution of this  Amendment by the parties  hereto,
the MGS Agreement shall be and hereby is amended as follows:

          (a) APPENDIX A TO SCHEDULE 1 is hereby amended to read in its entirety
     as follows:

          "5.  Qwest shall be entitled to receive a cash payment  equal to [TEXT
               DELETED] of any payments or credits  which KMC receives  from any
               provider of ingress or egress trunks for the MGS Circuits. To the
               extent  received from such  provider,  KMC shall pay Qwest within
               [TEXT  DELETED] of the end of each  calendar  quarter  during the
               Term.

<PAGE>

               In the  event  any  amount  received  by KMC from a  provider  of
               ingress or egress is required to be returned by KMC pursuant to a
               requirement of law or order of any court or regulatory  authority
               ("Forfeited Amount"),  KMC shall have the right to bill Qwest for
               [TEXT DELETED] of such Forfeited  Amount,  up to a maximum of the
               total amount  previously paid to Qwest under this paragraph,  and
               Qwest shall, within [TEXT DELETED], repay such amounts to KMC."

     3. REFERENCE TO AND EFFECT ON THE MGS AGREEMENT.

          (a) The MGS Agreement,  as amended  hereby,  and all other  documents,
     instruments  and  agreements   executed  and/or   delivered  in  connection
     therewith,  remains in full force and effect,  and are hereby  ratified and
     confirmed.

          (b) Except as expressly provided herein,  the execution,  delivery and
     effectiveness of this Amendment shall not operate as a waiver of any right,
     power or remedy of Qwest or KMC, nor  constitute a waiver of any  provision
     of the MGS Agreement or any other  documents,  instruments  and  agreements
     executed and/or delivered in connection therewith.

     4.  GOVERNING  LAW.  THIS  AMENDMENT  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE OTHER REMAINING TERMS OF THE MGS AGREEMENT AND THE INTERNAL
LAWS (AS OPPOSED TO CONFLICT OF LAW PROVISIONS) OF THE STATE OF NEW YORK.

     5. PARAGRAPH  HEADINGS.  The paragraph headings contained in this Amendment
are and shall be without  substance,  meaning or content of any kind  whatsoever
and are not a part of the agreement among the parties hereto.

     6.   COUNTERPARTS.   This   Amendment  may  be  executed  in  one  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.


                                       2

<PAGE>

     IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and
year first above written.



KMC Telecom VI Inc.

By: /S/ CONSTANCE LOOSEMORE
    -----------------------

Name: CONSTANCE LOOSEMORE
      ---------------------

Title: --------------------


Qwest Communications Corporation

By: /S/ RICK WESTON
    -----------------------

Name: RICK WESTON
      ---------------------

Title: SVP-QIS
       --------------------


Qwest Communications International Inc.

By: /S/ YASH RANA
    -----------------------

Name: YASH RANA
      ---------------------

Title: ASSOCIATE GENERAL COUNCIL
       -------------------------


Agreed and Consented to:

Dresdner Kleinwort Benson North America Leasing, Inc.


By: /S/ JAY MATHEWSON      /S/ ERIC DOLLMAN
    -----------------      ----------------

Name: JAY MATHEWSON        ERIC DOLLMAN
      ---------------      ----------------

Title: PRESIDENT           ASSISTANT VICE PRESIDENT
       --------------      ------------------------



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