UCC and FARF Assessment on Local Transmission Components to Enhanced Services in July 2008

Effective on invoices issued in July, 2008, AT&T will apply the
Universal Connectivity Charge (UCC) to the access line component of Frame Relay
to ATM Service Interworking (including IP-enabled Frame Relay and ATM), INCS,
and Enhanced VPN Services. The UCC allows AT&T to recover its contribution
to USF associated with the interstate telecommunications service component of
these enhanced services.

Federal Access Recovery Fee

The Federal Access Recovery Fee (FARF) is a charge designed to recover, in
part, AT&T’s costs of purchasing local access service from Local Exchange
Carriers (LECs), which include regulatory fees that LECs assess on

Effective with the first invoice after July 1, 2008, AT&T will begin
billing a monthly Federal Access Recovery Fee (FARF) and applicable taxes. This
charge will be based on the price of the local access service component that is
integrated into the following enhanced services: Managed Internet Service
(MIS), and/or Private Network Transport (PNT) service and AT&T VPN
Tunneling Service (AVTS). The FARF percentage is subject to change.