DALLAS, TX, September 15, 1999 - Allegiance Telecom, Inc. (Nasdaq: ALGX) announced today that it received Public Service Commission (PSC) authority to provide competitive local exchange services in the state of Florida. The Company will initially deploy a network in Miami, with services throughout the surrounding suburbs -- targeted for operation in the second half of 2000.

Allegiance will offer Florida businesses a full package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services.

"Businesses in Florida deserve a reliable choice for telecommunications services and we are excited to bring the benefits of competition to them," said Royce Holland, chairman and CEO of Allegiance Telecom. "Allegiance provides a one-stop shop for all telecom services offering customers the value of state-of-the-art technology, consolidated billing arrangements and superior customer service. Users of voice, data and Internet services will have an expanded choice for their communications needs, similar to the choices customers can now make when selecting a long distance phone company."

"The Florida Public Service Commission's commitment to quickly approve qualified competitive entrants such as Allegiance ensures valuable benefits to consumers and should be commended," said Robert McCausland, vice president of regulatory and interconnection for Allegiance Telecom. "I'm confident that the people of Florida are grateful to have a regulator which is focused on providing a meaningful choice in fulfilling their telecommunications needs." Headquartered in Dallas, Texas, Allegiance is a facilities-based competitive local exchange carrier (CLEC) that offers businesses a complete 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. Allegiance is currently operational in 17 markets including Atlanta, Boston, Chicago, Dallas, Fort Worth, Houston, Long Island, Los Angeles, New York, Northern New Jersey, Oakland, Orange County, Philadelphia, San Diego, San Francisco, San Jose and Washington D.C.

The Company's web address is www.allegiancetele.com. Allegiance's common stock is traded on the Nasdaq National Market under the symbol ALGX. 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.