DALLAS, TX, February 23, 1998 -- Allegiance Telecom, Inc. announced today that it received competitive local exchange service authority in Georgia. Atlanta will be one of Allegiance Telecom's first cities in operation, targeted for service in early 1998. The company's network will be in Atlanta with services throughout the surrounding suburbs.

Allegiance plans to provide Atlanta businesses with a full package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services. The Company is targeting 24 major metropolitan areas in the U.S. with its "one-stop shopping" approach. Other markets scheduled for initial service in 1998 include Dallas, New York, Chicago and Los Angeles.

"Allegiance is looking forward to having the opportunity to bring the benefits of competition to customers in Atlanta," said Royce Holland, chairman and CEO of Allegiance Telecom. "Users of voice, data and Internet services will soon have an expanded choice for their communications needs, similar to the choices customers can now make when selecting a long distance phone company."

"The Georgia Public Service Commission should be commended for their quick turnaround on our application for local exchange service authority," said Robert

McCausland, vice president of regulatory and interconnection for Allegiance Telecom. "This speedy approval is not surprising, however, since the Georgia PSC has always been eager to work with competitors to open up the local telephone market to competition."

NOTE TO EDITOR: Royce Holland, chairman and CEO of Allegiance Telecom, was one of the original founders of MFS Communications Company, the first major competitor to the Bell System. As president of MFS, Holland was an industry leader in developing the competitive provisions of the Telecommunications Act of 1996, which opened the local exchange market to competition throughout the U.S. Under Holland's leadership, MFS grew from a privately held start-up operation to one of the Nasdaq 100 Index companies with annual revenue of approximately $1 billion and a market value of approximately $13 billion.