AT&T Sees Future in HomeRF

AT&T Corp. may have shed its AT&T Broadband subsidiary, but the company is not giving up on broadband technologies.
On Monday the company signaled its intentions with plans to make a “controlled introduction” of DSL service this year, and then
followed up Tuesday by joining the HomeRF Working Group as a contributor member.

“AT&T looks forward to working with HomeRF members and other home networking groups to develop new applications and to offer a
smooth migration path from today’s analog telephone services to a new generation of multimedia services we’ll offer over AT&T’s
broadband networks,” said Steve Huels, transport products and services vice president, AT&T Consumer.

AT&T seems eager to exploit the latest version of HomeRF, HomeRF 2.0. The company said the standard’s new voice capability, combined
with AT&T’s advanced voice and data services, will give AT&T customers both high-speed Internet access and the ability to make
telephone calls over broadband connections that have the same quality as those made over traditional telephone lines. The standard
also supports up to eight voice connections, which would allow the company to push extra services, even in homes in which the wiring
and RJ-11 phone jacks only support two telephone lines.

“By using the license-free 2.4 GHz frequency band and integrating voice, data and entertainment on the telephone handset, we hope to
make HomeRF the worldwide cordless phone standard,” said Ken Haase, chair of the HomeRF Working Group.

AT&T’s decision to join the HomeRF Working Group builds on its announcement Monday that it will issue a tracking stock for its
consumer business, which, along with working to offer local service in markets it expects to be profitable, will also make a push in
DSL using the assets it acquired last spring from NorthPoint Communications.

Betsy Bernard, president and chief executive officer of the consumer division, told investors Monday that the company expects the
DSL operations to be profitable in three years.