DALLAS, August 19, 2002 -- Allegiance Telecom, Inc. (Nasdaq: ALGX), a leading integrated communications provider, announced it has established electronic bonding links for trouble ticket creation and tracking between its computer systems and those of SBC Southwestern Bell, Pacific Bell and Ameritech. The creation of this direct application-to-application communications link greatly reduces the time and manpower required by Allegiance for processing trouble tickets with these incumbent local exchange carriers (ILECs).

A facilities-based competitive local exchange carrier for medium and small businesses, Allegiance Telecom currently serves more than 135,000 customers in 36 cities across the United States, including Dallas, Ft. Worth, Houston, San Antonio, Austin and St. Louis; Los Angeles, San Francisco, San Diego, San Jose, Oakland, Orange County and Ontario/Riverside; Chicago, Detroit and Cleveland - cities where SBC Southwestern Bell, Pacific Bell or Ameritech is the ILEC. Allegiance has its own communications network, including telecommunications switches and central office equipment; the so-called "last mile" wiring from the central office to the customer premises is leased from these ILECs.

When a service problem arises, Allegiance and the ILEC must work together to determine exactly where the trouble exists. Previously, an ILEC service group was contacted by telephone in order to establish a trouble ticket to trace the problem. Updates and current status were verified with still more telephone calls.

Under the new electronic bonding system for trouble tickets announced today, Allegiance is now able to improve customer service and gain further efficiencies by exchanging information between Allegiance and SBC through the new electronic interface. The system allows for mechanized "real time" transmission of trouble reports to SBC.

In addition, several different transactions can be accomplished under the new electronic bonding system. Initial trouble tickets can be created, current up-to-the-minute status of tickets can be easily determined, and tickets can be modified with additional information or canceled. Allegiance can also verify SBC's completion of trouble tickets, assuring the task is completed to the satisfaction of the customer and both companies.

With trouble ticket bonding completed, the process of "telephone tag" between Allegiance and SBC for status updates is replaced by a real time, interactive exchange of information to expedite the resolution of trouble tickets. And the direct computer-to-computer communication reduces errors due to mis-keying or mis-translation of important trouble ticket information.

As was previously done with Allegiance Telecom's electronic bonding for provisioning of new service requests with ILECs, Allegiance plans to use the trouble ticket system interfaces developed in cooperation with SBC to expedite similar resolution with the other ILECs. Allegiance is presently 100 percent electronically bonded through the entire provisioning process with all four Bell companies. Similarly, today's announcement signals the company's first step toward attaining 100 percent trouble administration ticket bonding with all other ILECs.

"Electronic bonding for trouble tickets is the next step in Allegiance's drive to automate "back office" procedures," said Royce J. Holland, chairman and CEO of Allegiance Telecom. "As with our earlier bonding for local service requests, this new link will tremendously improve service for our medium and small business customers. SBC has eagerly embraced this initiative, and we salute their efforts to further simplify and streamline the interconnection process."

"This collaboration and teamwork is mutually beneficial for both parties, but most important of all, it is great for competition in the local phone market and it is great news for customers, " said David Cole, President, Industry Markets for SBC Southwestern Bell.

Allegiance Telecom is a facilities-based integrated communications provider headquartered in Dallas, Texas. As the leader in competitive local service for medium and small businesses, Allegiance offers "One source for business telecom(tm)"- a complete telecommunications package, including local, long distance, international calling, high-speed data transmission and Internet services and a full suite of customer premise communications equipment and service offerings. Allegiance serves 36 major metropolitan areas in the U.S. with its single source approach. Allegiance's common stock is traded on the Nasdaq National Market under the symbol ALGX.

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and the Company intends that such forward- looking statements be subject to the safe harbors created thereby. The words "believes," "expects," "estimates," "anticipates," "plans," "will be" and "forecasts" and similar words or expressions identify forward-looking statements made by or on behalf of the Company. These forward-looking statements were derived using numerous assumptions and are subject to many uncertainties and factors that may cause the actual results of the Company to be materially different from those stated in such forward-looking statements. Examples of such uncertainties and factors include, but are not limited to, the Company's ability to timely and effectively provision new customers; the Company's ability to retain existing customers; the Company's ability to obtain additional financing should it be necessary to do so; the Company's ability to develop and maintain efficient billing, customer service and information systems; and technological, regulatory or other developments in the industry and general economy that might adversely affect the Company. Additional factors are set forth in the Company's SEC reports, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2002. The Company does not undertake any obligation to update or revise any forward-looking statement made by it or on its behalf, whether as a result of new information, future events or otherwise.