AT&T Selects 2Wire Residential Gateway for AT&T U-verse(sm).

SAN ANTONIO -- Wireless gateway enables IP-enabled services to be used throughout the home

AT&T Inc. (NYSE: T) today announced that a $43 million, one-year contract has been awarded to 2Wire to deliver new Internet Protocol (IP)-based residential gateways for the AT&T U-verse(sm) suite of services.(1)

The residential gateway device will create a home network that delivers IP-based services throughout the home - IP-based video, high-speed Internet access and, eventually, voice over IP service.

"2Wire is a proven leader in the broadband gateway market and has now developed innovative IP gateways to help us deliver AT&T U-verse services to our customers," said Lea Ann Champion, senior executive vice president, in charge of operations for AT&T Project Lightspeed. "The residential gateway plays a significant role in ensuring customers have access to IP-enabled services throughout the home and on various IP-enabled devices."

AT&T companies plan to use the 2Wire HomePortal(R) 3000 series, which supports fiber-to-the-premises and VDSL technologies.

The residential gateways support multimedia coaxial networking within the home for distribution of bandwidth-intensive applications, such as high-definition video, over existing home wiring. The gateways come equipped with an integrated wireless access point, remote management capabilities, and advanced security features such as a professional grade firewall and automatic wireless security.

"2Wire's residential gateways will extend the AT&T network directly into the subscriber's home, taking the burden of home network management off of the subscriber, and making the enhanced digital experience as simple and enjoyable as it is powerful," said Brian Hinman, president and CEO of 2Wire. "We are proud to be part of this project, continuing our relationship with the AT&T companies, and collaborating on the delivery of these important IP-based services."

In September 2005, the AT&T companies, formerly the SBC Communications Inc. family of companies, announced an agreement with Motorola and Scientific-Atlanta to provide set-top boxes for AT&T U-verse TV. These set tops will connect to the residential gateway to deliver the IP video to TVs.

Project Lightspeed is the initiative to expand the fiber-optics network deeper into neighborhoods to deliver AT&T U-verse TV, high-speed Internet access and, eventually, Voice over IP services. AT&T companies expect to reach approximately 18 million households by the first half of 2008 as part of initial deployment, using fiber-to-the-node (FTTN) and fiber-to-the-premises technologies.

(1) The contract was awarded by SBC Services, Inc. Since the close of the AT&T acquisition in late November, SBC companies have been making the necessary legal and regulatory filings to transition product and subsidiary names to the new AT&T brand.

About the New AT&T

AT&T Inc. is one of the world's largest telecommunications holding companies and is the largest in the United States. Operating globally under the AT&T brand, AT&T companies are recognized as the leading worldwide providers of IP-based communications services to business and as leading U.S. providers of high-speed DSL Internet, local and long distance voice, and directory publishing and advertising services. AT&T Inc. holds a 60 percent ownership interest in Cingular Wireless, which is the No. 1 U.S. wireless services provider with more than 52 million wireless customers. Additional information about AT&T Inc. and AT&T products and services is available at www.TheNewATT.com.

About 2Wire

2Wire is a provider of broadband service platforms for the DSL market. 2Wire's suite of solutions offers DSL providers an integrated triple play of data, voice, and media services. 2Wire's products and services include the award-winning HomePortal residential gateways, the MediaPortal(TM) set top box, and a robust Component Management System (CMS) for service management and provisioning. 2Wire's products are distributed exclusively by the major DSL service providers, including AT&T Inc. (formerly SBC), BT, and TELMEX. Headquartered in San Jose, California, 2Wire was founded in July 1998 by Brian L. Hinman, a co-founder of PictureTel Corporation (formerly NASDAQ: PCTL) and Polycom, Inc. (NASDAQ: PLCM).

2Wire and HomePortal are registered trademarks of 2Wire, Inc. in the United States and in other jurisdictions throughout the world. MediaPortal is a trademark of 2Wire, Inc.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.

(C) 2005 SBC Knowledge Ventures, L.P. All rights reserved.