Subsidiary is National Provider of Web Hosting and Internet Connectivity

DALLAS, June 26, 2001 – Hosting.com, a subsidiary of Allegiance Telecom (Nasdaq: ALGX) is officially renaming Virtualis Systems, the North Hollywood, California-based Web hosting company it acquired last year. Allegiance announced that Virtualis will now conduct business as the Los Angeles-based office of Hosting.com, operating in conjunction with other Allegiance Telecom Web hosting operations.

Hosting.com is a national provider of Web hosting and Internet connectivity services, targeted to small and medium-sized enterprises (SMEs). Services include shared Web hosting, dedicated and managed hosting, colocated hosting services and a variety of Internet connectivity options, all running on Allegiance’s nationwide backbone and infrastructure.

“We are excited to launch the Hosting.com brand in the Los Angeles market,” said Joe Bartlett, vice president of marketing for Hosting.com. “We have a solid base of customers in the Los Angeles area and look forward to providing them and new customers the Web hosting and Internet connectivity product family and the national support and infrastructure of Hosting.com.”

Allegiance Telecom provides telecommunications services, including local calling, long distance, international calling and high-speed data services. Since its founding in 1997, Allegiance Telecom has rapidly become one of the leading facilities-based integrated communications providers in the U.S. Allegiance provides its business customers with a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services and e-commerce offerings. Hosting.com is marketing its services nationally; Allegiance currently has 32 markets operational, including Atlanta, Austin, Baltimore, Boston, Chicago, Cleveland, Dallas, Denver, Detroit, Fort Lauderdale, Fort Worth, Houston, Long Island, Los Angeles, Miami,
Minneapolis/St. Paul, New York, Northern New Jersey, Oakland, Orange County, Philadelphia, Phoenix, Portland, Sacramento, St. Louis, San Antonio, San Diego, San Francisco, San Jose, Seattle, Tampa and Washington, D.C. Allegiance's common stock is traded on the Nasdaq National Market under the symbol ALGX.