In many ways, these strides

have positioned us well to start this new chapter in our progress. The

restructuring of AT&T will enable us to expand this important work,

while realizing greater value for shareholders. Meanwhile, we'll endeavor

to live up to the fine traditions and attributes of the AT&T brand.

One of our major goals of the

last few years has been to better use the substantial capacity of our

broadband technology to bring new and valuable services to customers.

AT&T's commitment to this process has helped us accelerate the deployment

of affordable, fully-featured digital telephone service, high-speed Internet

access services, and many new video channels in our digital cable service.

The beauty of our broadband

network is that, as our upgrades are completed, we're able to bring these

services to customers over a single wire, at an affordable price.

This work was challenging at

the outset. It meant major system construction in many of our service

areas, implementation of new processes and procedures, education of our

customers, and new technical training for our personnel.

We've conquered many of these

challenges, and we've had great success in rolling out our new services.

Currently, we're providing digital cable service to about 2.5 million

customers. The number of customers for our high-speed Internet access

services exceeds one million. And we'll end 2000 with more than a half-million

customers for our digital telephone service, which in most communities

is the first-ever competition to the incumbent local telephone monopoly.

That commitment to local telephone

service is key. Some skeptics have argued that our restructuring plan

will cause us to lose our appetite for providing phone service. Not so.

In October alone, we added 65,000 new telephone customers. That number

will get larger every month, as we move into serving millions of telephone

customers in 2001 and the years ahead. The type of network that we've

constructed with its huge capacity makes telephone service a natural and

desirable product for us, and for our customers.

Here in metropolitan Atlanta,

we've demonstrated progress in several areas. Our $500-million rebuild

and upgrade, one of the largest projects in the nation, is 84 percent

complete and will be finished at the end of 2001. This new network is

making digital television and high-speed Internet services available in

more than 80 percent of our service area.

Close to 60 percent of our

service area now has access to our local telephone service, priced 26

percent lower than our competition. We are also excited about video-on-demand,

a service now being tested with select customers in Cobb County. We intend

to offer this new service to all of our Atlanta customers in 2001.

Across the country, the number

of service installations we're performing is increasing every day. And

we'll keep the process rolling this coming year, in an effort to help

you realize the benefit of our broadband technology.

Our predecessor companies were

pioneers in the introduction of broadband services. AT&T's ownership

has enabled us to institutionalize these innovations and bring them to

customers on a broad scale. There's no turning back. It's full-speed-ahead

for AT&T Broadband, as we put our broadband technology to work, to

help improve the way you live work, and play.

Steve White

Senior Vice President

AT&T Broadband, Atlanta

Region