AT&T Announces $350 Million Investment to Bring New Technology and Video Competition to Consumers in North Carolina

Raleigh, North Carolina, July 31, 2007

AT&T Inc. (NYSE:T) has announced plans to invest approximately $350 million throughout the next several years in fiber network upgrades, further broadband deployment and Internet-based technologies to bring new services, including cutting-edge television, to North Carolina consumers.

"North Carolina has long been a state whose leaders have understood the wisdom of embracing advances in technology," said Cynthia Marshall, president, AT&T North Carolina. "Today, North Carolinians are reaping some of the rewards of that foresight. We commend the General Assembly and Governor Mike Easley for their commitment to ensuring that North Carolina consumers would be among the first in the Southeast to enjoy the benefits of cutting-edge competitive video services."

The announcement is a direct result of the forward-looking approach to the communications and entertainment industry adopted by the General Assembly last year in passing House Bill 2047, the Video Service Competition Act. HB 2047 streamlined the process by which companies could enter the competitive video-services market. Companies now must obtain a state-issued franchise rather than negotiate with individual municipalities, a process that before could take years to complete.

"We look forward to delivering the most advanced technology available in video, voice and Internet services to North Carolina," Marshall said. "Consumers will see a new world of communications and entertainment."

"North Carolinians deserve the benefits of competition," said Rep. Becky Carney, a co-sponsor of the state franchise legislation. "The investment by AT&T shows that eliminating barriers to competition brings choice to consumers and investment to our state."

"There is no doubt that consumers are the big winners today," said Sen. Dan Clodfelter, another co-sponsor. "Land-based video competition will bring better customer service and lower prices. As AT&T's commitment today shows, it also results in new investment in our communities."

According to the Internet Innovation Alliance, increased competition in the video market would result in increased investment across the industry. Competition could also spur new entrants, contractors, equipment-makers, manufacturers and service-providers to create nearly 3,000 jobs in North Carolina.

AT&T's infrastructure and investment will include a new world of communications and entertainment through AT&T U-verseSM service. AT&T is the only national provider to offer a 100 percent IP-based television service, and that makes AT&T U-verse TV one of the most robust and feature-rich services available today.

The planned network investment by AT&T companies in North Carolina does not change AT&T's capital expenditure guidance for 2007 and 2008. AT&T is in the process of implementing the AT&T U-verse network in the Southeast region and plans to provide a comprehensive update later this year.

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Cautionary Language Concerning Forward-Looking Statements
Information set forth in this press release contains forward-looking statements and financial estimates that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this document based on new information or otherwise.

About AT&T
AT&T Inc. (NYSE: T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at

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