AT&T Wireless Bundle Kicks Off in Fort Worth

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A new era in the battle for local-communications dominance
began last week, when AT&T delivered on its promise to commercially launch
fixed-wireless voice and data services in direct competition with wireline providers.

AT&T said it has started offering Fort Worth, Texas,
residents up to four lines of what calls toll-quality voice service delivered in
Internet-protocol packet format, along with fast Internet access using network
infrastructure that also supports mobile services.

"We're ready for prime time," said John
Zeglis, president of AT&T and chairman and CEO of the Wireless Group. "We're
using groundbreaking technology to deliver choice and new services to customers."

The new "Digital Broadband" service is priced at
$25.95 per month for the first voice line along with call waiting, caller ID and three-way
calling service, with additional lines priced at $7 each.

Internet access, provided by AT&T WorldNet, is priced
at $34.95, with downlink speeds operating at up to 512 kilobits per second.

Users have the option to choose other Internet service
providers or multiple ISPs. They are given five IP addresses to accommodate Internet
access via multiple PCs and another four IP addresses to accommodate all of the lines of
voice service.

Voice-service prices represent a discount of up to 25
percent from the prices for comparable service from Southwestern Bell, said AT&T
spokesman Rich Blasi. The marketing effort, which includes a mailing of 100,000 pieces
this week, is focused initially on parts of the city and surrounding communities where
demand for high-speed data access is high and no digital-subscriber-line or cable options
are yet available, he noted.

"One of the things we learned from our market trial
[in Dallas] is that 99 percent of our subscribers take both voice and data," Blasi
said. "So we're looking at people who really want high-speed access."

But the carrier will quickly run out of low-hanging fruit
on the data side as it markets in Fort Worth, where Charter Communications Inc. has been
offering @Home high-speed data service for a year and has established a strong retail
presence through an affiliation with CompUSA.

"We look on [AT&T] as just one more competitor to
deal with," said George Rosehart, vice president of marketing at Charter's Fort
Worth operation.

Charter has also introduced digital TV there and has
"plans for getting into the telephony side," Rosehart said. The company is
testing voice-over-cable in Wisconsin and a Northeastern location, he added.

AT&T's fixed-wireless facilities now pass some
300,000 households in the Fort Worth area, and the telco has plans to install facilities
passing another 1.3 million in two additional unnamed cities this year, Blasi said. Next
year, the company roll out the service on a nationwide scale, he added.

The Fort Worth launch is the first large-scale
residential-market offering of voice and data over fixed-wireless links in the U.S. and
the first time that local voice service has been delivered in IP-packet format on a
commercial basis.

To accomplish the feat at affordable prices,
AT&T's development team used a combination of proprietary software and
off-the-shelf hardware components in conjunction with existing mobile wireless
infrastructure. The result: a startup phase cost-per-customer of $750, including
installation, said AT&T senior vice president Larry Seifert, who is general manager of
the fixed-wireless group.

"We're leveraging off 100 million devices that
are shipping this year and have secured over 80 patents to get to the right combination of
cost and performance," Seifert said.

Because each 512 kbps data link is shared among those
customers who are reached over any one of four transmission paths from the radio
transmitter, the data rates can fall to lower rates during peak usage periods.

But the system is geared to sustain the highest possible
rates per customer through the use of sophisticated buffering mechanisms at the base
station, Seifert said. "If two people click at once, one waits the fraction of a
second it takes for the other's page to download, so the data rate remains the
same," he noted.

The fixed-wireless service uses a 10-megahertz segment of
the 30-MHz spectrum license AT&T holds for personal-communications services in Fort
Worth, allowing it to deliver voice and data to house-mounted antennas from base stations
already installed for the mobile service.

The antennas are wired via standard twisted-pair copper to
a VCR-size box that can be located at any point in the home where there is an AC
electrical outlet and a phone jack. This allows customers to use all of their existing
phones, PCs and other appliances to receive the service.

At the box, voice signals are converted between IP-packet
format and standard analog-voice format. Data signals are transmitted in HomePNA format,
the new home local-area networking protocol that supports delivery of data signals at
speeds of up to 10 megabits per second to multiple PCs over conventional telephone wires.

"All you need is a single phone jack, and you have
four lines of voice service and Internet service delivered throughout the home,"
Blasi said. Customers pay 7 cents a minute for long distance, with all services combined
onto a single bill, he noted.

AT&T has acquired enough PCS spectrum nationwide to
support the delivery of fixed-wireless services to 95 percent of U.S. households, Blasi
said. Some of those PCS licenses are for 30 MHz blocks and are used by AT&T for
digital mobile voice and data services, while others are 10 MHz blocks in markets where
AT&T is using older cellular spectrum licenses to deliver mobile services.

This puts AT&T in a position to make good on its
promise to use fixed-wireless technology to compete in local markets where it does not own
cable systems or have voice-delivery agreements with cable affiliates. "That's
still the plan," Blasi said.

Officials declined to discuss future plans because of
securities-law restrictions surrounding the upcoming AT&T Wireless stock offering. But
they made clear that the service options, especially on the data side, will get better
over time, starting with an upgrade of base-station hardware to support delivering data at
1 megabit per second starting this summer.

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