DALLAS, TEXAS, January 3, 2000 -- Allegiance Telecom, Inc. (Nasdaq: ALGX), a competitive local exchange carrier (CLEC), announced that it will file a Registration Statement today with the Securities and Exchange Commission relating to a proposed public offering of 10,000,000 shares of common stock, 6,000,000 of which are being sold by the Company and 4,000,000 of which are being sold by existing stockholders. The Company is issuing these shares to raise additional capital to fund its continued national market rollout.

The securities being offered may not be sold nor may offers to buy be accepted prior to the time the Registration Statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.