Second Phase of E-Commerce Products Improves Communication and Collaboration, Increasing Productivity

DALLAS, October 3, 2000 -- Employees at small and medium-sized businesses can now work together more efficiently with Allegiance Telecom's Web Office, a new service using private, secure web sites. It is designed to help employees access a wide variety of business information using a private corporate "intranet." These productive internal communication networks are no longer just for big companies with their own servers and large engineering staff -- Allegiance Telecom's Web Office makes it easy for any size business to easily and quickly share information with employees including:

• Instant updates on company news and vital data
• Shared timetables and calendars
• Central repositories for forms, manuals, company standards and other mission critical information
• Discussion boards for collaboration among geographically separated employees
• One-stop view of e-mail communications from multiple services and
• Shared, company-wide address book.

Earlier this year, Allegiance announced an easy-to-use E-Commerce Package, designed especially for small and medium-sized enterprises. The turnkey system provides businesses with everything needed to market products on-line, including technical set-up and applications, letting users focus on managing and operating their business. Allegiance provides the ability to easily create an on-line catalog of products and services, shopping cart service to help customers accumulate and catalog purchases, back office support systems, access to secure transaction processing capacity and more.

"Now we are rolling out Allegiance Telecom's Web Office, an innovative way for companies to improve their communication and become more productive by using an Intranet," said Gene Shimshock, Allegiance vice president of e-commerce. "It's a password-protected secure place that employees, suppliers, service providers, even customers-anyone that you designate-can use to share information instantly and accurately. This capability truly puts everyone in your company on the same page, a critical competitive advantage in the Information Age."

Most large companies now communicate and collaborate internally on the Web. But many small businesses use the Internet as an important means to reach the external world and miss out on the opportunity to use the Web as a tool for internal communication. Simply by setting up a secure Web site, accessible only to those with a "need to know," companies can gain an instant, reliable way to share important information. Allegiance Telecom's Web Office requires no special software for end users; it works on popular existing browsers such as Microsoft Internet Explorer or Netscape Navigator.

Setting up intranets usually demands the resources of a large company, with the technical expertise, large staff of people, and formidable hardware required to design and manage a complicated, password-protected site. Now Allegiance Telecom's Web Office unleashes this powerful capability for smaller companies.

Allegiance Telecom hosts the site and provides a set of ready-made applications that get small businesses up and running in a very short time. There's no need to learn complex software or have in-house information technology experts to set up and run the site. Using a simple, intuitive Web-based interface, the designated company administrator sets up programs, hosted on secure servers in Allegiance Telecom's state-of-the-art facilities. Customers realize tremendous savings as they only pay for the server capacity used and don't have to buy new equipment or use information systems resources.

Based in Dallas, Allegiance Telecom 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. Allegiance is currently operational in 25 U.S. markets and is targeting 36 major metropolitan areas with its' "one-stop shopping" approach. The Company's Web address is: www.allegiancetele.com. Allegiance's common stock is traded on the Nasdaq National Market under the symbol ALGX.