SBC Picks AT&T Sites For New Bundled Offer

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SBC Communications Inc. and AT&T Broadband &
Internet Services may soon be going head-to-head in a consumer marketing battle for
bundled-service customers in Fremont, Calif., and Dallas, with other markets due to
follow.

SBC announced plans last week to tout its "Simple
Solutions" package of bundled telecommunications and entertainment services in those
two cities. AT&T Broadband is offering its own bundles in Fremont, and it plans to do
so in Dallas later this year.

There's one major difference in the competitive bundling
efforts: AT&T Broadband's "Personal Network" bundles will include
long-distance phone service, while Simple Solutions cannot, at least for now.

SBC will offer the Simple Solutions bundles under the
Southwestern Bell brand in Dallas, while Pacific Bell will brand the offers in Fremont.

Those bundles include local phone service, wireless service
and dial-up or digital-subscriber-line Internet access. The video will come via DirecTV
Inc.'s direct-broadcast satellite service.

Package prices start at $34.95 per month, with savings
cited as being in the 6 percent to 35 percent range compared with buying the services
separately.

Moreover, the first 10,000 "Entertainment
Solution" customers at Southwestern Bell and Pacific Bell will get a one-time savings
of $300 on DirecTV equipment and installation, according to SBC, which signed a marketing
deal with the DBS company in July.

"We are very confident about our ability to compete
with AT&T in this area," Southwestern Bell vice president of consumer marketing
Mark Pitchford said in a prepared statement.

AT&T Corp. spokesman Mark Siegel replied, "We
must've scared them. We're flattered that they've taken a page from our playbook, but I'm
not sure they're in the same game as we are." By that, he meant, "There's no
long-distance" in SBC's bundles.

Siegel added that DirecTV customers must make other
arrangements for local broadcast TV stations, and SBC's DSL service is "not nearly as
fast as high-speed Internet access via cable."

But Siegel said AT&T doesn't plan to cite those
shortcomings in future advertising. "We're not going to play that game. We're focused
on meeting our customers' needs."

In its Fremont test, AT&T Broadband has said that it's
offering a 25 percent discount on long-distance and local phone service for cable
subscribers.

SBC said Fremont and Dallas are only the first battlefields
with AT&T. Director of offer management Robert Boyanovsky said last Thursday that SBC
intends to "deploy rapidly across our seven-state telco footprint," and to be in
"10 to 16 markets at the end of the year with a full product offering."

He added, "Long distance is at the mercy of the FCC
[Federal Communications Commission]," which has barred the Baby Bells from long
distance since they were spun off from AT&T in the 1980s. SBC is hopeful that that
"final piece of the puzzle" will be added "soon," he said.

Boyanovsky said SBC's "integrated advertising plans
are being finalized," but the initial direct-marketing phase -- direct mail,
telemarketing and billstuffers -- will break soon. Later, mass-media will be added, as
well. DirecTV will contribute marketing support in those cities, he added.

But it will probably be year-end before one-bill payment
catches up with SBC's one-stop shopping. "We're getting there" on a single bill,
Boyanovsky said. "DBS will be separate for the first 90 days, until the systems are
integrated."

AT&T Broadband offers one bill in Fremont for most
services. Siegel said the Internet-access portion will be added to the bill later.

In its prepared statement, SBC said that as the company
expands to other major markets outside of its territory through its pending merger with
Ameritech Corp., it "will aggressively market these new offerings" in those
markets, as well.

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