AT&T Announces New Ethernet Contract with East Bay Municipal Utility District

San Francisco Bay Area Water and Sewage Provider Increases Capabilities Through Enhanced Network

San Francisco, California, January 23, 2007

AT&T Inc. (NYSE: T) today announced a new network and data services contract with East Bay Municipal Utility District (EBMUD), a water and wastewater service provider that serves more than 1.3 million residents and businesses in Alameda and Contra Costa counties on the eastern side of San Francisco Bay.

Under the terms of the five-year contract, AT&T will provide EBMUD with OPT-E-MAN® switched Ethernet service to connect EBMUD's local access networks (LANs) within the same metropolitan area, giving EBMUD the ability to communicate across its four metro locations. AT&T will also deliver Ethernet Dedicated Internet Access (EDIA), a pure Ethernet solution for always-available Internet access. By consolidating EBMUD's voice and data services from various locations and placing them on one converged network, EBMUD will experience increased bandwidth, which will allow for more efficient communication and connectivity. The flexibility of these services will allow EBMUD to easily adopt and manage new applications and technologies in the future.

EBMUD will also take advantage of a backup data center supported by AT&T's IP-enabled Ethernet Private Line Service (EPLS) backbone. The backup data center will help ensure improved network security for EBMUD's headquarters and remote locations.

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About East Bay Municipal Utility District
The East Bay Municipal Utility District (EBMUD) is a publicly owned utility that provides water and wastewater service to portions of two counties in the eastern side of San Francisco Bay Area. Its water supply system covers 325 square miles and serves some 1.3 million customers. EBMUD is a publicly owned utility formed under the Municipal Utility District Act passed by the California Legislature in 1921. Additional information about EBMUD is available at http://www.ebmud.com/index.html.

About AT&T
AT&T Inc. is a premier communications holding company in the United States and around the world, with operating subsidiaries providing services under the AT&T brand. AT&T is the recognized world leader in providing IP-based communications services to business and the U.S. leader in providing wireless, high speed Internet access, local and long distance voice, and directory publishing and advertising services. As part of its "three screen" integration strategy, AT&T is expanding video entertainment offerings to include such next-generation television services as AT&T U-verseSM TV. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at www.att.com.

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