December 2, 2008

JEFFERSON CITY---Southwestern Bell Telephone Company d/b/a AT&T Missouri (AT&T Missouri) has been declared a competitive telecommunications company, having met the statutory test in House Bill 1779 (HB 1779), passed by the Missouri legislature this year.

As a competitive company, AT&T Missouri will no longer be subject to price or rate regulation by the Missouri Public Service Commission in any of its exchanges.

In 2005, AT&T Missouri sought to have a number of its exchanges deemed competitive under a state law which took effect in August 2005. It was determined that 77 exchanges for residential services and 75 exchanges for business services met the criteria established under the law and those exchanges were deemed competitive, allowing the marketplace to determine the price for services in those exchanges. These include Bloomsdale and St. Mary.

Under HB 1779, a telecommunications company shall be deemed a competitive company if 55% or more of its total subscriber access lines (customer telephone lines) are in exchanges where its services have been declared competitive.

In AT&T Missouri's filing with the PSC, the company states subscriber access lines in its current competitively classified exchanges constitute over 90% of its total subscriber access lines. In a filing with the commission, the PSC staff stated AT&T Missouri met the criteria to become a competitive company.

Under this current AT&T Missouri case, the remaining 82 exchanges will be designated as competitive for residential services. In these exchanges, HB 1779 states any annual increase in rates for residential basic local telecommunications service shall not exceed $2.00 per line per month for the next four years.

The commission will continue to monitor AT&T Missouri's residential basic local rates as well as the percentage of residences and businesses that subscribe to AT&T Missouri's services. If, for example, the PSC staff determines that AT&T Missouri has not complied with the rate limitations of the law or that its rates have become so high that they serve as a deterrent to receiving service from the company, the staff is to notify the commission in a written report.

The AT&T Missouri exchanges that will become competitive under this filing for residential services include: Adrian, Agency, Altenburg-Frohna, Argyle, Armstrong, Beaufort, Benton, Bismarck, Bloomfield, Bloomsdale, Bowling Green, Brookfield, Campbell, Cardwell, Carl Junction, Carrollton, Caruthersville, Center, Chaffee, Charleston, Clarksville, Climax Springs, Deering, DeKalb, Downing, East Prairie, Edina, Elsberry, Essex, Fayette, Fisk, Frankford, Freeburg, Gideon, Glasgow, Hayti, Higbee, Holcomb, Hornersville, Jasper, Knob Noster, Lamar, LaMonte, Lancaster, Leadwood, Lilbourne, Linn, Lockwood, Louisiana, Macks Creek, Malden, Marceline, Marston, Meta, Montgomery City, Morehouse, New Franklin, New Madrid, Oak Ridge, Old Appleton, Oran, Patton, Paynesville, Pierce City, Portageville, Puxico, Qulin, Richwoods, Risco, Rushville, Scott City, Senath, Slater, St. Marys, Stanberry, Trenton, Tuscumbia, Versailles, Vienna, Wardell, Wellsville and Westphalia.

Prior to being designated as competitive, the above exchanges were under price cap regulation for residential services. Under price cap regulation, basic local telephone rates changed, up or down, based upon a consumer price index.