ConnectSouth Launches DSL Service and Internet Applications in First Eight Sunbelt Markets. Company Helps Small and Medium Sized Businesses to Bridge Digital Divide.

ConnectSouth Communications, Inc. today officially began operations in eight cities across the southeastern and southwestern U.S.: Austin and Waco, Texas; Tulsa and Oklahoma City, Oklahoma; Mobile and Birmingham, Alabama; New Orleans, LA; and Biloxi/Gulfport, Mississippi. Targeting traditionally underserved markets, ConnectSouth will offer turnkey Internet solutions, high-speed DSL connectivity and Web-based Internet tools to the more than 5 million small and medium-sized businesses throughout the South.

ConnectSouth will invest $100 million in committed equity to initiate service and to quickly expand into 32 additional second and third-tier markets across the Sunbelt by the end of 2000. By providing affordable Internet access, along with a variety of web-design and application services, ConnectSouth is offering a solution to the growing Digital Divide problem.

The Digital Divide has left many small to medium-sized businesses in the South at an economic disadvantage compared to some larger businesses in high-growth areas of the country. The ability to have affordable access to the Internet is an essential part of any future growth strategy. As the industry's first true "e-enabler," ConnectSouth is helping to bridge the Digital Divide by providing the necessary technology and tools for businesses to compete in the new digital economy.

"Today's announcement marks an important milestone for ConnectSouth as we work to level the playing field for businesses in these underserved markets," declared Jeff Mucci, Chairman, CEO and Founder of ConnectSouth. "Aside from our record setting start-up funding, we also have assembled one of the most experienced senior management teams in the industry to create a business culture that focuses of the needs of the customer."

In addition, ConnectSouth will operate a 24 hour, 7 day a week call center and online tech support program, as well as provide customers with a constant flow of new web-based applications from its own local network operations center in Austin.

"As the market evolves, providers offering access only are more likely to get trapped in a commodity environment. ConnectSouth appears to have a business model that complements access with a variety of Internet applications that should prove to be of value to the customer," said Mike Lowe, Senior Industry Analyst at Cahners Instat Group.

ConnectSouth's wide range of Internet-based business tools and applications are modular to suit the needs of individual businesses. Specifically tailored service offerings include e-business and e-commerce tools, Web site and domain hosting, virtual e-mail, Intranets and Extranets, virtual private networks, firewalls, and remote network access via switched Internet.

"Our customers are receiving more than broadband connections," said Mucci. "Customers will have access to a knowledge base that combines technology and business experience. ConnectSouth employees are proud to be a partner in their customers' endeavors. Everyone at ConnectSouth is committed to making our company the premier regional DSL provider in the United States."

ConnectSouth Communications, Inc. (www.connectsouth.com), headquartered in Austin, Texas, is an "e-enabler," providing a full range of high-speed connectivity and Internet tools for small and medium-sized businesses in traditionally underserved cities and towns. ConnectSouth is one of the best-funded companies of its kind, with over $100 million in committed equity from Morgan Stanley Dean Witter Private Equity, Fleet Equity Partners and Waller-Sutton Media Partners.