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EXHIBIT 10.38

AGREEMENT

    THIS AGREEMENT is made by and between BellSouth Telecommunications, Inc.,
("BellSouth"), a Georgia corporation, and Birch Telecom of the South, Inc.
("Birch"), a Delaware corporation, and shall be deemed effective as of the date
of signatures by both parties. This Agreement may refer to either BellSouth or
Birch or both as a "Party" or "Parties."

W I T N E S S E T H

    WHEREAS, BellSouth is a local exchange telecommunications company authorized
to provide telecommunications services in the states of Alabama, Florida,
Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and
Tennessee; and

    WHEREAS, Birch is or seeks to become an alternative local exchange
telecommunications company ("CLEC") authorized to provide telecommunications
services in the states of Alabama, Florida, Georgia, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina, and Tennessee; and

    WHEREAS, the Parties wish to resell BellSouth's telecommunications services
and/or interconnect their facilities, purchase network elements and other
services, and exchange traffic specifically for the purposes of fulfilling their
obligations pursuant to sections 251 and 252 of the Telecommunications Act of
1996 ("the Act").

    NOW THEREFORE, in consideration of the mutual agreements contained herein,
BellSouth and Birch agree as follows:

 
1.  
   
Term of the Agreement  
1.1  
   
The term of this Agreement shall be two years, beginning as of the date of
signature by both Parties and shall apply to the states of Alabama, Florida,
Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and
Tennessee. If as of the expiration of this Agreement, a Subsequent Agreement (as
defined in Section 2.2 below) has not been executed by the Parties, this
Agreement shall continue on a month-to-month basis at the same terms conditions
and prices as those in effect as of the expiration date hereof while a
Subsequent Agreement is being negotiated. The Parties' rights and obligations
with respect to this Agreement after expiration shall be as set forth in
Section 2.4 below.  
1.2  
   
The Parties agree that by no later than one hundred and eighty (180) days prior
to the expiration of this Agreement, they shall commence negotiations with
regard to the terms, conditions and prices of resale and/or local
interconnection to be effective beginning on the expiration date of this
Agreement ("Subsequent Agreement").  
1.3  
   
If, within one hundred and thirty-five (135) days of commencing the negotiation
referred to in Section 2.2 above, the Parties are unable to satisfactorily
negotiate new resale and/or local interconnection terms, conditions and prices,
either Party may petition the Commission to establish appropriate local
interconnection and/or resale arrangements pursuant to 47 U.S.C. 252. The
Parties agree that, in such event, they shall encourage the Commission to issue
its order regarding the appropriate local interconnection and/or resale
arrangements no later than the expiration date of this Agreement. The Parties
further agree that in the event the Commission does not issue its order prior to
the expiration date of this Agreement, or if the Parties continue beyond the
expiration date of this Agreement to negotiate the local interconnection and/or
resale arrangements without Commission intervention, the terms, conditions and
prices ultimately ordered by the Commission, or negotiated by the Parties, will
be effective retroactive to the day following the expiration date of this
Agreement.  

 
   
 

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1.4  
   
Notwithstanding the foregoing, in the event that as of the date of expiration of
this Agreement and conversion of this Agreement to a month-to-month term, the
Parties have not entered into a Subsequent Agreement and the parties have not
commenced good faith negotiations in a timely manner, no arbitration proceeding
has been filed in accordance with Section 2.3 above, or the Parties have not
mutually agreed (where permissible) to extend the arbitration window for
petitioning the applicable Commission(s) for resolution of those terms upon
which the Parties have not agreed, then either Party may terminate this
Agreement upon sixty (60) days notice to the other Party. In the event that
BellSouth terminates this Agreement as provided above, BellSouth shall continue
to offer interconnection, unbundled network elements and services to Birch
pursuant to the terms, conditions and rates set forth in BellSouth's then
current standard interconnection agreement. The Parties may continue to
negotiate a Subsequent Agreement, and the terms of such Subsequent Agreement
shall be effective retroactive to the day following expiration of this Agreement
 
2.  
   
Good Faith Performance  
   
   
In the performance of their obligations under this Agreement, the Parties shall
act in good faith and consistently with the intent of the Act. Where notice,
approval, or similar action by a Party is permitted or required by any provision
of this Agreement, (including, without limitation, the obligation of the Parties
to further negotiate the resolution of new or open issues under this Agreement)
such action shall not be unreasonably delayed, withheld, or conditioned.  
3.  
   
Ordering Procedures  
3.1  
   
Birch shall provide BellSouth its Carrier Identification Code (CIC), Operating
Company Number (OCN), Group Access Code (GAC) and Access Customer Name and
Address (ACNA) code as applicable prior to placing its first order.  
3.2  
   
The Parties agree to adhere to the BellSouth Local Interconnection and Facility
Based Ordering Guide and Resale Ordering Guide, as appropriate for the services
ordered.  
3.3  
   
Birch shall pay charges for Operational Support Systems (OSS) as set forth in
this Agreement in Attachment 1 and/or in Attachment 2, 3, 5 and 7 as applicable.
 
4.  
   
Parity  
   
   
When Birch purchases, pursuant to Attachment 1 of this Agreement,
telecommunications services from BellSouth for the purposes of resale to end
users, BellSouth shall provide said services so that the services and service
provisioning are at least equal in quality, subject to the same conditions, and
provided within the same provisioning time intervals that BellSouth provides to
its affiliates, subsidiaries and end users. To the extent technically feasible,
the quality of a Network Element, as well as the quality of the access to such
Network Element provided by BellSouth to Birch shall be at least equal in
quality to that which BellSouth provides to itself, its subsidiaries,
affiliates, or other carriers. The quality of the interconnection between the
networks of BellSouth and the network of Birch shall be at a level that is equal
to that which BellSouth provides itself, a subsidiary, an Affiliate, or any
other party. The interconnection facilities shall be designed to meet the same
technical criteria and service standards that are used within BellSouth's
network and shall extend to a consideration of service quality as perceived by
end users and service quality as perceived by Birch.  
   
   
   
   
   
 

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5.  
   
Directory Listings  
   
   
BellSouth shall provide Birch and their customers on a non-discriminatory basis,
access to white pages and yellow pages directory listings in the same manner
BellSouth provides such listings to its own end users, and consistent with the
following terms:  
5.1  
   
Listings. Birch shall provide all new, changed and deleted listings, on a timely
basis and BellSouth or its agent will include Birch residential and business
customer listings in the appropriate White Pages (residential and business) or
alphabetical directories. Birch will provide to BellSouth all Birch end users
that wish to be omitted from directories. Directory listings will make no
distinction between Birch and BellSouth subscribers.  
5.1.1  
   
Enhanced Listings. Where BellSouth offers to publish, at no charge, in its white
pages directory Enhanced White Pages Listings to its retail customers, BellSouth
shall publish such listings, at no charge and under the same terms and
conditions, for Birch for its end users. Where BellSouth charges its retail
customers for Enhanced White Pages Listings, BellSouth shall publish such
listings under the same terms and conditions to Birch for its Customers at the
applicable wholesale discount set forth in Attachment 1.  
5.1.2  
   
Yellow Pages Directory Listings. Where BellSouth offers to publish in its Yellow
Pages Directory free Yellow Pages listings to its retail end users, BellSouth
shall publish such listings, at no charge, and under the same terms and
conditions to Birch for its end users. Where BellSouth charges business end
users for Yellow Pages basic Directory Listings, BellSouth shall provide one
Yellow Pages basic Directory Listing for each AT&T Customer, who subscribes to
business services, at BellSouth tariffed rates at the applicable wholesale
discount. BellSouth shall not provide "lead" information on Birch end users to
its Yellow Pages directory publishing Affiliate without written permission from
Birch.  
5.2  
   
Rates. Unless otherwise agreed, BellSouth and Birch will provide to each other
subscriber primary listing information in the White Pages at no charge except
for discounted applicable wholesale service order charges as set forth in the
appropriate tariffs.  
5.3  
   
Procedures for Submitting Birch Subscriber Information are found in BellSouth's
Ordering Guide for manually processed listings and in the Local Exchange
Ordering Guide for mechanically submitted listings.  
5.3.1  
   
Notwithstanding any provision(s) to the contrary, Birch agrees to provide to
BellSouth, and BellSouth agrees to accept, Birch's Subscriber Listing
Information (SLI) relating to Birch's customers in the geographic area(s)
covered by this Interconnection Agreement. Birch authorizes BellSouth to release
all such Birch SLI provided to BellSouth by Birch to qualifying third parties
via either license agreement or BellSouth's Directory Publishers Database
Service (DPDS), General Subscriber Services Tariff, Section A38.2, as the same
may be amended from time to time. Such CLEC SLI shall be intermingled with
BellSouth's own customer listings of any other CLEC that has authorized a
similar release of SLI. Where necessary, BellSouth will use good faith efforts
to obtain state commission approval of any necessary modifications to Section
A38.2 of its tariff to provide for release of third party directory listings,
including modifications regarding listings to be released pursuant to such
tariff and BellSouth's liability therunder. BellSouth's obligation pursuant to
this Section shall not arise in any particular state until the commission of
such state has approved modifications to such tariff.  

 
   
 

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5.3.2  
   
No compensation shall be paid to Birch for BellSouth's receipt of Birch SLI, or
for the subsequent release to third parties of such SLI. In addition, to the
extent BellSouth incurs costs on an ongoing basis to administer the release of
Birch SLI, Birch shall pay to BellSouth its proportionate share of the
reasonable costs associated therewith. Before BellSouth incurs any cost under
this Section, it shall inform Birch of its good faith estimate of Birch's share
of such cost, and Birch shall have the option of agreeing in writing to the cost
or of discontinuing the release of Birch's SLI.  
5.3.3  
   
BellSouth shall not be liable for the content or accuracy of any SLI provided by
Birch under this Agreement. Birch shall indemnify, hold harmless and defend
BellSouth from and against any damages, losses, liabilities, demands claims,
suits, judgments, costs and expenses (including but not limited to reasonable
attorneys' fees and expenses) arising from BellSouth's tariff obligations or
otherwise and resulting from or arising out of any third party's claim of
inaccurate Birch listings or use of the SLI provided pursuant to this Agreement.
BellSouth shall forward to Birch any complaints received by BellSouth relating
to the accuracy or quality of Birch listings.  
5.3.4  
   
Listings and subsequent updates will be released consistent with BellSouth
system changes and/or update scheduling requirements.  
5.4  
   
Unlisted/Non-Published Subscribers. Birch will be required to provide to
BellSouth the names, addresses and telephone numbers of all Birch customers that
wish to be omitted from directories.  
5.5  
   
Inclusion of Birch Customers in Directory Assistance Database. BellSouth will
include and maintain Birch subscriber listings in BellSouth's Directory
Assistance databases at no charge and Birch shall provide such Directory
Assistance listings at no charge. BellSouth will update the Directory Assistance
database with the same timeliness as for its retail end users. BellSouth and
Birch will formulate appropriate procedures regarding lead-time, timeliness,
format and content of listing information. BellSouth shall advise Birch as soon
as possible, but in no event fewer than six (6) months in advance, of any
changes in the maintenance of the Directory Listings database or any mechanisms
or interfaces, whether industry standard or not, pursuant to which BellSouth
will provide Directory Listings to Birch.  
5.6  
   
Listing Information Confidentiality. BellSouth will accord Birch's directory
listing information the same level of confidentiality that BellSouth accords its
own directory listing information, and BellSouth shall limit access to Birch's
customer proprietary or confidential directory information to those BellSouth
employees who are involved in the preparation of listings and such information
shall not be used for other purposes..  
5.7  
   
Optional Listings. Additional listings and optional listings will be offered by
BellSouth at tariffed rates as set forth in the General Subscriber Services
Tariff.  
5.8  
   
Directory Delivery. BellSouth or its agent shall deliver White Pages directories
and Yellow Pages directories to Birch subscribers at no charge or as specified
in a separate BAPCO agreement.  

 
   
 

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6.  
   
Bona Fide Request/New Business Request Process for Further Unbundling  
   
   
If Birch is a facilities based provider or a facilities based and resale
provider, this section shall apply. BellSouth shall, upon request of Birch,
provide to Birch access to its network elements at any technically feasible
point for the provision of Birch's telecommunications service where such access
is necessary and failure to provide access would impair the ability of Birch to
provide services that it seeks to offer. Any request by Birch for access to a
network element, interconnection option, or for the provisioning of any service
or product that is not already available shall be treated as a Bona Fide
Request/New Business Request, and shall be submitted to BellSouth pursuant to
the Bona Fide Request/New Business Request process set forth following.  
6.1  
   
A Bona Fide Request/New Business Request shall be submitted in writing to
Birch's Account Manager by Birch and shall specifically identify the requested
service date, technical requirements, space requirements and/or such
specifications that clearly define the request such that BellSouth has
sufficient information to analyze and prepare a response.  
6.2  
   
Upon request, a service or product requested by another carrier through BFR/NBR
process shall be available to Birch on the same rates, terms and conditions.  
7.  
   
Court Ordered Requests for Call Detail Records and Other Subscriber Information
 
7.1  
   
To the extent technically feasible, BellSouth maintains call detail records for
Birch end users for limited time periods and can respond to subpoenas and court
ordered requests for this information. BellSouth shall maintain such information
for Birch end users for the same length of time it maintains such information
for its own end users.  
7.2  
   
Birch agrees that BellSouth will respond to subpoenas and court ordered requests
delivered directly to BellSouth for the purpose of providing call detail records
when the targeted telephone numbers belong to Birch end users. Billing for such
requests will be generated by BellSouth and directed to the law enforcement
agency initiating the request.  
7.3  
   
Where BellSouth is providing to Birch telecommunications services for resale or
providing to Birch the local switching function, then Birch agrees that in those
cases where Birch receives subpoenas or court ordered requests regarding
targeted telephone numbers belonging to Birch end users, if Birch does not have
the requested information, Birch will advise the law enforcement agency
initiating the request to redirect the subpoena or court ordered request to
BellSouth. Where the request has been forwarded to BellSouth, billing for call
detail information will be generated by BellSouth and directed to the law
enforcement agency initiating the request.  
7.4  
   
In all other instances, Birch will provide Birch end user and/or other customer
information that is available to Birch in response to subpoenas and court orders
for their own customer records. When BellSouth receives subpoenas or court
ordered requests regarding targeted telephone numbers belonging to Birch end
users, BellSouth will advise the law enforcement agency initiating the request
to redirect the subpoena or court ordered request to Birch.  
8.  
   
Liability and Indemnification  
8.1  
   
BellSouth Liability. BellSouth shall take financial responsibility for its own
actions in causing, or its lack of action in preventing, unbillable or
uncollectible Birch revenues.  
8.2  
   
Birch Liability. In the event that, by amendment to this agreement or otherwise,
Birch consists of two (2) or more separate entities as set forth in the preamble
to this Agreement, all such entities shall be jointly and severally liable for
the obligations of Birch under this Agreement.  
   
   
 

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8.3  
   
Liability for Acts or Omissions of Third Parties. Neither BellSouth nor Birch
shall be liable for any act or omission of another telecommunications company
providing a portion of the services provided under this Agreement.  
8.4  
   
Limitation of Liability.  
8.4.1  
   
Each Party's liability to the other for any loss, cost, claim, injury or
liability or expense, including reasonable attorney's fees relating to or
arising out of any negligent act or omission in its performance of this
Agreement whether in contract or in tort, shall be limited to a credit for the
actual cost of the services or functions not performed or improperly performed,
except to the extent otherwise provided for in this Agreement. Notwithstanding
the foregoing, claims for damages by a Party, any customer of that Party, or any
other person or entity resulting from the gross negligence or willful misconduct
of the other Party shall not be subject to such limitation of liability.  
8.4.2  
   
Limitations in Tariffs. A Party may, in its sole discretion, provide in its
tariffs and contracts with its Customer and third parties that relate to any
service, product or function provided or contemplated under this Agreement, that
to the maximum extent permitted by Applicable Law, such Party shall not be
liable to Customer or third Party for (i) any Loss relating to or arising out of
this Agreement, whether in contract, tort or otherwise, that exceeds the amount
such Party would have charged that applicable person for the service, product or
function that gave rise to such Loss and (ii) Consequential Damages. To the
extent that a Party elects not to place in its tariffs or contracts such
limitations of liability, and the other Party incurs a Loss as a result thereof,
such Party shall indemnify and reimburse the other Party for that portion of the
Loss that would have been limited had the first Party included in its tariffs
and contracts the limitations of liability that such other Party included in its
own tariffs at the time of such Loss.  
8.4.3  
   
Neither BellSouth nor Birch shall be liable for damages to the other's terminal
location, POI or other company's customers' premises resulting from the
furnishing of a service, including, but not limited to, the installation and
removal of equipment or associated wiring, except to the extent caused by a
company's negligence or willful or intentional misconduct or by a company's
failure to properly ground a local loop after disconnection.  
8.4.4  
   
Under no circumstance shall a Party be responsible or liable for indirect,
incidental, or consequential damages, including, but not limited to, economic
loss or lost business or profits, damages arising from the use or performance of
equipment or software, or the loss of use of software or equipment, or
accessories attached thereto, delay, error, or loss of data. In connection with
this limitation of liability, each Party recognizes that the other Party may,
from time to time, provide advice, make recommendations, or supply other
analyses related to the Services, or facilities described in this Agreement,
and, while each Party shall use diligent efforts in this regard, the Parties
acknowledge and agree that this limitation of liability shall apply to provision
of such advice, recommendations, and analyses.  
8.5  
   
Indemnification for Certain Claims. The Party providing services hereunder, its
affiliates and its parent company, shall be indemnified, defended and held
harmless by the Party receiving services hereunder against any claim, loss or
damage arising from the receiving company's use of the services provided under
this Agreement pertaining to (1) claims for libel, slander or invasion of
privacy arising from the content of the receiving company's own communications,
or (2) any claim, loss or damage claimed by the customer of the Party receiving
services arising from such company's use or reliance on the providing company's
services, actions, duties, or obligations arising out of this Agreement.  

 
   
 

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8.6  
   
Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED TO THE CONTRARY IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER PARTY
CONCERNING THE SPECIFIC QUALITY OF ANY SERVICES, OR FACILITIES PROVIDED UNDER
THIS AGREEMENT. THE PARTIES DISCLAIM, WITHOUT LIMITATION, ANY WARRANTY OR
GUARANTEE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARISING FROM
COURSE OF PERFORMANCE, COURSE OF DEALING, OR FROM USAGES OF TRADE.  
9.  
   
Intellectual Property Rights and Indemnification  
9.1  
   
No License. Except for the limited right to access BellSouth information through
various operational support systems as set forth in this Agreement for use as
expressly set forth herein, no patent, copyright, trademark or other proprietary
right is licensed, granted or otherwise transferred by this Agreement. Birch is
strictly prohibited from any use, including but not limited to in sales, in
marketing or advertising of telecommunications services, of any BellSouth name,
service mark or trademark, except that (1) Birch may make factual references to
the BellSouth name in response to a customer or potential customer inquiry
regarding the source of the underlying services or the identity of repair
technicians, and (2) Birch may use the BellSouth name in comparative advertising
so long as the reference is truthful and factual, does not relate to the source
of the underlying service and does not imply any agency relationship,
partnership, endorsement, sponsorship or affiliation by or with BellSouth..  
9.2  
   
Ownership of Intellectual Property. Any intellectual property which originates
from or is developed by a Party shall remain in the exclusive ownership of that
Party. Except for a limited license to use patents or copyrights to the extent
necessary for the Parties to use any facilities or equipment (including
software) or to receive any service solely as provided under this Agreement, no
license in patent, copyright, trademark or trade secret, or other proprietary or
intellectual property right now or hereafter owned, controlled or licensable by
a Party, is granted to the other Party or shall be implied or arise by estoppel.
It is the responsibility of each Party to ensure at no additional cost to the
other Party that it has obtained any necessary licenses in relation to
intellectual property of third Parties used in its network that may be required
to enable the other Party to use any facilities or equipment (including
software), to receive any service, or to perform its respective obligations
under this Agreement.  
9.3  
   
Indemnification. The Party providing a service pursuant to this Agreement will
defend the Party receiving such service or data provided as a result of such
service against claims of infringement arising solely from the use by the
receiving Party of such service and will indemnify the receiving Party for any
damages awarded based solely on such claims in accordance with Section 8 of this
Agreement.  
9.4  
   
Claim of Infringement. In the event that use of any facilities or equipment
(including software), becomes, or in reasonable judgment of the Party who owns
the affected network is likely to become, the subject of a claim, action, suit,
or proceeding based on intellectual property infringement, then said Party shall
promptly and at its sole expense, but subject to the limitations of liability
set forth below:  
9.4.1  
   
modify or replace the applicable facilities or equipment (including software)
while maintaining form and function, or  
9.4.2  
   
obtain a license sufficient to allow such use to continue.  

 
   
 

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9.4.3  
   
In the event 9.4.1 or 9.4.2 are commercially unreasonable, then said Party may,
terminate, upon reasonable notice, this contract with respect to use of, or
services provided through use of, the affected facilities or equipment
(including software), but solely to the extent required to avoid the
infringement claim.  
9.5  
   
Exception to Obligations. Neither Party's obligations under this Section shall
apply to the extent the infringement is caused by: (i) modification of the
facilities or equipment (including software) by the indemnitee; (ii) use by the
indemnitee of the facilities or equipment (including software) in combination
with equipment or facilities (including software) not provided or authorized by
the indemnitor provided the facilities or equipment (including software) would
not be infringing if used alone; (iii) conformance to specifications of the
indemnitee which would necessarily result in infringement; or (iv) continued use
by the indemnitee of the affected facilities or equipment (including software)
after being placed on notice to discontinue use as set forth herein.  
9.6  
   
Exclusive Remedy. The foregoing shall constitute the Parties' sole and exclusive
remedies and obligations with respect to a third party claim of intellectual
property infringement arising out of the conduct of business under this
Agreement.  
10.  
   
Proprietary and Confidential Information  
10.1  
   
Proprietary and Confidential Information: Defined. It may be necessary for
BellSouth and Birch, each as the "Discloser," to provide to the other party, as
"Recipient," proprietary and confidential information(including trade secret
information) including but not limited to technical, financial, marketing,
staffing and business plans and information, strategic information, proposals,
request for proposals, specifications, drawings, prices, costs, procedures,
processes, business systems, software programs, techniques, customer account
data, call detail records and like information. This proprietary and
confidential information also includes, but is not limited to all orders for
Services and Network Elements placed by either Party, and information that would
constitute Customer Proprietary Network Information and Recorded Usage Data,
whether disclosed by the Discloser or otherwise acquired by the Recepient in the
course of the performance of this Agreement. (This proprietary and confidential
information is collectively the Discloser's "Information"). All Information
provided to Recipient by Discloser shall be treated as proprietary and
confidential.  
10.2  
   
Use and Protection of Information. Recipient shall use the Information solely
for the purpose(s) of performing this Agreement, and Recipient shall protect
Information from any use, distribution or disclosure except as permitted
hereunder. Recipient will use the same standard of care to protect Information
as Recipient uses to protect its own similar confidential and proprietary
information, but not less than a reasonable standard of care. Recipient may
disclose Information solely to the Authorized Representatives of the Recipient
who (a) have a substantive need to know such Information in connection with
performance of the Agreement; (b)  have been advised of the confidential and
proprietary nature of the Information; and (c) have personally agreed in writing
to protect from unauthorized disclosure all confidential and proprietary
information, of whatever source, to which they have access in the course of
their employment. Unless otherwise agreed, Recipient shall not permit employees
or agents of Recipient with end user marketing, product development, or any
other non-Discloser purpose, to have access to Information under any
circumstances. "Authorized Representatives" are the officers, directors and
employees of Recipient and its Affiliates, as well as Recipient's and its
Affiliates' consultants, contractors, counsel and agents. "Affiliates" means any
company that is owned in whole or in part, now or in the future, directly or
indirectly through a subsidiary, by a party hereto.  

 
   
 

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10.3  
   
Ownership, Copying & Return of Information. Information remains at all times the
property of Discloser. Recipient may make tangible or electronic copies, notes,
summaries or extracts of Information only as necessary for use as authorized
herein. All such tangible or electronic copies, notes, summaries or extracts
must be marked with the same confidential and proprietary notice as appears on
the original. Upon Discloser's request, all or any requested portion of the
Information (including, but not limited to, tangible and electronic copies,
notes, summaries or extracts of any information) will be promptly returned to
Discloser or destroyed according to Discloser's request, and Recipient will
provide Discloser with written certification stating that such Information has
been returned or destroyed.  
10.4  
   
Exceptions. Discloser's Information does not include: (a) any information
publicly disclosed by Discloser; (b) any information Discloser in writing
authorizes Recipient to disclose without restriction; (c) any information
already lawfully known to Recipient at the time it is disclosed by the
Discloser, without an obligation to keep confidential; or (d) any information
Recipient lawfully obtains from any source other than Discloser, provided that
such source lawfully disclosed and/or independently developed such information.
If Recipient is required to provide Information to any court or government
agency pursuant to written court order, subpoena, regulation or process of law,
Recipient must first provided Discloser with prompt written notice of such
requirement and cooperate with Discloser to appropriately protect against or
limit the scope of such disclosure. To the fullest extent permitted by law,
Recipient will continue to protect as confidential and proprietary all
Information disclosed in response to a written court order, subpoena, regulation
or process of law.  
10.5  
   
Equitable Relief. Recipient acknowledges and agrees that any breach or
threatened breach of this Agreement is likely to cause Discloser irreparable
harm for which money damages may not be an appropriate or sufficient remedy.
Recipient therefore agrees that Discloser or its Affiliates, as the case may be,
are entitled to receive injunctive or other equitable relief to remedy or
prevent any breach or threatened breach of this Agreement. Such remedy is not
the exclusive remedy for any breach or threatened breach of this Agreement, but
is in addition to all other rights and remedies available at law or in equity.  
10.6  
   
Survival of Confidentiality Obligations. The parties' rights and obligations
under this Section 10 shall survive and continue in effect until three (3)
 years after the expiration or termination date of this Agreement with regard to
all Information exchanged during the term of this Agreement. Thereafter, the
parties' rights and obligations hereunder survive and continue in effect with
respect to any Information that is a trade secret under applicable law.  
11.  
   
Assignments  
   
   
Any assignment by either Party to any non-affiliated entity of any right,
obligation or duty, or of any other interest hereunder, in whole or in part,
without the prior written consent of the other Party shall be void. Such consent
will not be unreasonably withheld. A Party may assign this Agreement or any
right, obligation, duty or other interest hereunder to an Affiliate company of
the Party without the consent of the other Party. All obligations and duties of
any Party under this Agreement shall be binding on all successors in interest
and assigns of such Party. No assignment or delegation hereof shall relieve the
assignor of its obligations under this Agreement in the event that the assignee
fails to perform such obligations.  

 
   
 

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12.  
   
Resolution of Disputes  
   
   
Except as otherwise stated in this Agreement, the Parties agree that if any
dispute arises as to the interpretation of any provision of this Agreement or as
to the proper implementation of this Agreement, either Party may petition the
Commission for a resolution of the dispute. However, each Party reserves any
rights it may have to seek judicial review of any ruling made by the Commission
concerning this Agreement.  
   
   
The Parties agree that this Section does not prevent either Party from seeking
temporary equitable remedies, including temporary restraining orders. A request
by a Party to a court or a regulatory authority for interim measures or
equitable relief shall not be deemed a waiver of the obligation to comply with
the Dispute Resolution provisions.  
   
   
Nonexclusive Remedies except as otherwise expressly provided in this Agreement,
each of the remedies provided under this Agreement is cumulative and is in
addition to any remedies that may be available at law or in equity.  
13.  
   
Taxes  
13.1  
   
Definition. For purposes of this Section, the terms "taxes" and "fees" shall
include but not limited to federal, state or local sales, use, excise, gross
receipts or other taxes or tax-like fees of whatever nature and however
designated (including tariff surcharges and any fees, charges or other payments,
contractual or otherwise, for the use of public streets or rights of way,
whether designated as franchise fees or otherwise) imposed, or sought to be
imposed, on or with respect to the services furnished hereunder or measured by
the charges or payments therefore, excluding any taxes levied on income.  
13.2  
   
Taxes and Fees Imposed Directly On Either Providing Party or Purchasing Party.  
13.2.1  
   
Taxes and fees imposed on the providing Party, which are not permitted or
required to be passed on by the providing Party to its customer, shall be borne
and paid by the providing Party.  
13.2.2  
   
Taxes and fees imposed on the purchasing Party, which are not required to be
collected and/or remitted by the providing Party, shall be borne and paid by the
purchasing Party.  
13.3  
   
Taxes and Fees Imposed on Purchasing Party But Collected And Remitted By
Providing Party.  
13.3.1  
   
Taxes and fees imposed on the purchasing Party shall be borne by the purchasing
Party, even if the obligation to collect and/or remit such taxes or fees is
placed on the providing Party.  
13.3.2  
   
To the extent permitted by applicable law, any such taxes and/or fees shall be
shown as separate items on applicable billing documents between the Parties.
Notwithstanding the foregoing, the purchasing Party shall remain liable for any
such taxes and fees regardless of whether they are actually billed by the
providing Party at the time that the respective service is billed.  

 
   
 

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13.3.3  
   
If the purchasing Party determines that in its opinion any such taxes or fees
are not payable, the providing Party shall not bill such taxes or fees to the
purchasing Party if the purchasing Party provides written certification,
reasonably satisfactory to the providing Party, stating that it is exempt or
otherwise not subject to the tax or fee, setting forth the basis therefor, and
satisfying any other requirements under applicable law. If any authority seeks
to collect any such tax or fee that the purchasing Party has determined and
certified not to be payable, or any such tax or fee that was not billed by the
providing Party, the purchasing Party may contest the same in good faith, at its
own expense. In any such contest, the purchasing Party shall promptly furnish
the providing Party with copies of all filings in any proceeding, protest, or
legal challenge, all rulings issued in connection therewith, and all
correspondence between the purchasing Party and the taxing authority.  
13.3.4  
   
In the event that all or any portion of an amount sought to be collected must be
paid in order to contest the imposition of any such tax or fee, or to avoid the
existence of a lien on the assets of the providing Party during the pendency of
such contest, the purchasing Party shall be responsible for such payment and
shall be entitled to the benefit of any refund or recovery.  
13.3.5  
   
If it is ultimately determined that any additional amount of such a tax or fee
is due to the imposing authority, the purchasing Party shall pay such additional
amount, including any interest and penalties thereon.  
13.3.6  
   
Notwithstanding any provision to the contrary, the purchasing Party shall
protect, indemnify and hold harmless (and defend at the purchasing Party's
expense) the providing Party from and against any such tax or fee, interest or
penalties thereon, or other charges or payable expenses (including reasonable
attorney fees) with respect thereto, which are incurred by the providing Party
in connection with any claim for or contest of any such tax or fee.  
13.3.7  
   
Each Party shall notify the other Party in writing of any assessment, proposed
assessment or other claim for any additional amount of such a tax or fee by a
taxing authority; such notice to be provided, if possible, at least ten
(10) days prior to the date by which a response, protest or other appeal must be
filed, but in no event later than thirty (30) days after receipt of such
assessment, proposed assessment or claim.  
13.4  
   
Taxes and Fees Imposed on Providing Party But Passed On To Purchasing Party.  
13.4.1  
   
Taxes and fees imposed on the providing Party, which are permitted or required
to be passed on by the providing Party to its customer, shall be borne by the
purchasing Party. Nothing in this Agreement shall be construed to create an
independent right in the providing Party to pass on taxes and or fees to the
purchasing Party.  
13.4.2  
   
To the extent permitted by applicable law, any such taxes and/or fees shall be
shown as separate items on applicable billing documents between the Parties.
Notwithstanding the foregoing, the purchasing Party shall remain liable for any
such taxes and fees regardless of whether they are actually billed by the
providing Party at the time that the respective service is billed.  

 
   
 

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13.4.3  
   
If the purchasing Party disagrees with the providing Party's determination as to
the application or basis for any such tax or fee, the Parties shall consult with
respect to the imposition and billing of such tax or fee. Notwithstanding the
foregoing, the providing Party shall retain ultimate responsibility for
determining whether and to what extent any such taxes or fees are applicable,
and the purchasing Party shall abide by such determination and pay such taxes or
fees to the providing Party. The providing Party shall further retain ultimate
responsibility for determining whether and how to contest the imposition of such
taxes and fees; provided, however, that any such contest undertaken at the
request of the purchasing Party shall be at the purchasing Party's expense.  
13.4.4  
   
In the event that all or any portion of an amount sought to be collected must be
paid in order to contest the imposition of any such tax or fee, or to avoid the
existence of a lien on the assets of the providing Party during the pendency of
such contest, the purchasing Party shall be responsible for such payment and
shall be entitled to the benefit of any refund or recovery.  
13.4.5  
   
If it is ultimately determined that any additional amount of such a tax or fee
is due to the imposing authority, the purchasing Party shall pay such additional
amount, including any interest and penalties thereon.  
13.4.6  
   
Notwithstanding any provision to the contrary, the purchasing Party shall
protect indemnify and hold harmless (and defend at the purchasing Party's
expense) the providing Party from and against any such tax or fee, interest or
penalties thereon, or other reasonable charges or payable expenses (including
reasonable attorney fees) with respect thereto, which are incurred by the
providing Party in connection with any claim for or contest of any such tax or
fee.  
13.4.7  
   
Each Party shall notify the other Party in writing of any assessment, proposed
assessment or other claim for any additional amount of such a tax or fee by a
taxing authority; such notice to be provided, if possible, at least ten
(10) days prior to the date by which a response, protest or other appeal must be
filed, but in no event later than thirty (30) days after receipt of such
assessment, proposed assessment or claim.  
13.5  
   
Mutual Cooperation. In any contest of a tax or fee by one Party, the other Party
shall cooperate fully by providing records, testimony and such additional
information or assistance as may reasonably be necessary to pursue the contest.
Further, the other Party shall be reimbursed for any reasonable and necessary
out-of-pocket copying and travel expenses incurred in assisting in such contest.
 
14.  
   
Force Majeure  
   
   
In the event performance of this Agreement, or any obligation hereunder, is
either directly or indirectly prevented, restricted, or interfered with by
reason of fire, flood, earthquake or like acts of God, wars, revolution, civil
commotion, explosion, acts of public enemy, embargo, acts of the government in
its sovereign capacity, labor difficulties, including without limitation,
strikes, slowdowns, picketing, or boycotts, unavailability of equipment from
vendor, changes requested by Customer, or any other circumstances beyond the
reasonable control and without the fault or negligence of the Party affected,
the Party affected, upon giving prompt notice to the other Party, shall be
excused from such performance on a day-to-day basis to the extent of such
prevention, restriction, or interference (and the other Party shall likewise be
excused from performance of its obligations on a day-to-day basis until the
delay, restriction or interference has ceased); provided however, that the Party
so affected shall use diligent efforts to avoid or remove such causes of
non-performance and both Parties shall proceed whenever such causes are removed
or cease.  
   
   
 

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15.   Year 2000 Compliance  
   
   
Each Party warrants that it has implemented a program the goal of which is to
ensure that all software, hardware and related materials (collectively called
"Systems") delivered, connected with BellSouth or supplied in the furtherance of
the terms and conditions specified in this Agreement: (i) will record, store,
process and display calendar dates falling on or after January 1, 2000, in the
same manner, and with the same functionality as such software records, stores,
processes and calendar dates falling on or before December 31, 1999; and
(ii) shall include without limitation date data century recognition,
calculations that accommodate same century and multicentury formulas and date
values, and date data interface values that reflect the century.  
16.  
   
Modification of Agreement  
16.1  
   
BellSouth shall make available, pursuant to 47 USC § 252 and the FCC rules and
regulations regarding such availability, to Birch any interconnection, service,
or network element provided under any other agreement filed and approved
pursuant to 47 USC § 252. The Parties shall adopt all rates, terms and
conditions concerning such other interconnection, service or network element and
any other rates, terms and conditions that are legitimately related. The adopted
interconnection, service, or network element, provision and/or agreement shall
apply to the same states as such other agreement and for the identical term of
such other agreement.  
16.2  
   
If Birch changes its name or makes changes to its company structure or identity
due to a merger, acquisition, transfer or any other reason, it is the
responsibility of Birch to notify BellSouth of said change and request that an
amendment to this Agreement, if necessary, be executed to reflect said change.  
16.3  
   
No modification, amendment, supplement to, or waiver of the Agreement or any of
its provisions shall be effective and binding upon the Parties unless it is made
in writing and duly signed by the Parties.  
16.4  
   
Execution of this Agreement by either Party does not confirm or infer that the
executing Party agrees with any decision(s) issued pursuant to the
Telecommunications Act of 1996 and the consequences of those decisions on
specific language in this Agreement. Neither Party waives its rights to appeal
or otherwise challenge any such decision(s) and each Party reserves all of its
rights to pursue any and all legal and/or equitable remedies, including appeals
of any such decision(s).  
16.5  
   
In the event that any effective legislative, regulatory (including generic
proceedings), judicial or other legal action materially affects any material
terms of this Agreement, or the ability of Birch or BellSouth to perform any
material terms of this Agreement, Birch or BellSouth may, provide written notice
to require that such terms be renegotiated, and the Parties shall renegotiate in
good faith such mutually acceptable new terms as may be required. In the event
that such new terms are not renegotiated within ninety (90) days after such
notice, the Dispute shall be referred to the Dispute Resolution procedure set
forth in Section 12.  
16.6  
   
If any provision of this Agreement, or the application of such provision to
either Party or circumstance, shall be held invalid, the remainder of the
Agreement, or the application of any such provision to the Parties or
circumstances other than those to which it is held invalid, shall not be
effective thereby, provided that the Parties shall attempt to reformulate such
invalid provision to give effect to such portions thereof as may be valid
without defeating the intent of such provision.  

 
   
 

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17.  
   
Waivers  
   
   
A failure or delay of either Party to enforce any of the provisions hereof, to
exercise any option which is herein provided, or to require performance of any
of the provisions hereof shall in no way be construed to be a waiver of such
provisions or options, and each Party, notwithstanding such failure, shall have
the right thereafter to insist upon the specific performance of any and all of
the provisions of this Agreement.  
18.  
   
Governing Law  
   
   
To the extent any provisions of this Agreement are subject to the jurisdiction
of the FCC, applicable federal rules and regulations shall govern those
provisions. To the extent any provisions of this Agreement are subject to the
jurisdiction of the state Commission, applicable Commission rules and
regulations shall govern those provisions. All other provisions of this
Agreement shall be governed by the laws of the state of Georgia.  
19.  
   
Arm's Length Negotiations  
   
   
This Agreement was executed after arm's length negotiations between the
undersigned Parties and reflects the conclusion of the undersigned that this
Agreement is in the best interests of all Parties.  
   
   
 

20.   Notices  
20.1  
   
Every notice, consent, approval, or other communications required or
contemplated by this Agreement shall be in writing and shall be delivered in
person or given by postage prepaid mail, address to:  
   
   
   
   
BellSouth Telecommunications, Inc.  
   
   
   
   
CLEC Account Team
9th Floor
600 North 19th Street
Birmingham, Alabama 35203  
   
   
   
   
and  
   
   
   
   
General Attorney—COU
Suite 4300
675 W. Peachtree St.
Atlanta, GA 30375  
   
   
   
   
Birch Telecom of the South, Inc.  
   
   
   
   
Greg Lawhon, General Counsel
2020 Baltimore Avenue
Kansas City, Missouri 64108-1914  
   
   
   
   
 

 
   
   
or at such other address as the intended recipient previously shall have
designated by written notice to the other Party.  
20.2  
   
Where specifically required, notices shall be by certified or registered mail.
Unless otherwise provided in this Agreement, notice by mail shall be effective
on the date it is officially recorded as delivered by return receipt or
equivalent, and in the absence of such record of delivery, it shall be presumed
to have been delivered the fifth day, or next business day after the fifth day,
after it was deposited in the mails.  

 
   
 

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20.3  
   
BellSouth shall provide Birchat least 30 day advance (or such shorter notice as
may be required or permitted by Commission order) notice via Internet posting of
price changes and of changes to the terms and conditions of services available
for resale in accordance with applicable Commission rules or orders. To the
extent that revisions occur between the time BellSouth notifies Birch of changes
under this Agreement and the time the changes are scheduled to be implemented,
BellSouth will immediately notify Birch of such revisions consistent with its
internal notification process.  
21.  
   
Rule of Construction  
   
   
No rule of construction requiring interpretation against the drafting Party
hereof shall apply in the interpretation of this Agreement.  
22.  
   
Headings of No Force or Effect  
   
   
The headings of Articles and Sections of this Agreement are for convenience of
reference only, and shall in no way define, modify or restrict the meaning or
interpretation of the terms or provisions of this Agreement.  
23.  
   
Multiple Counterparts  
   
   
This Agreement may be executed multiple counterparts, each of which shall be
deemed an original, but all of which shall together constitute but one and the
same document.  
24.  
   
Implementation of Agreement  
   
   
If Birch is a facilities based provider or a facilities based and resale
provider, this section shall apply. Within 60 days of the execution of this
Agreement, the Parties will adopt a schedule for the implementation of the
Agreement. The schedule shall state with specificity time frames for submission
of including but not limited to, network design, interconnection points,
collocation arrangement requests, pre-sales testing and full operational time
frames for the business and residential markets. An implementation template to
be used for the implementation schedule is contained in Attachment 10 of this
Agreement.  
25.  
   
Guides  
   
   
This Agreement contains references to numerous Guides maintained by BellSouth,
including, but not limited to, the BellSouth Local Interconnection and Facility
Based Ordering Guide, BellSouth Resale Ordering Guide, BellSouth Products and
Services Interval Guide, and the BellSouth Facility Based CLEC Activation
Requirements Customer Guide (together, "Guides"). Where this Agreement
references any BellSouth Guides, the Parties agree to adhere to such Guides,
provided that these Guides do not affect the substantive rights and obligations
of the Parties under this Agreement. In the event of a conflict between this
Agreement and any Guides, this Agreement controls. All intervals set forth in
the most current Guides available on the effective date of this contract shall
be available to Birch, regardless of future BellSouth updates to the Guides. In
the event BellSouth modifies the intervals set forth in the Guides after the
effective date of this agreement, Birch, at its sole option and upon written
notice to BellSouth,, may choose to continue with the intervals set forth at the
effective date of the agreement. Otherwise, the intervals in BellSouth's guides
shall apply.  
26.  
   
Filing of Agreement  
   
   
Upon execution of this Agreement it shall be filed with the appropriate state
regulatory agency pursuant to the requirements of Section 252 of the Act. If the
regulatory agency imposes any filing or public interest notice fees regarding
the filing or approval of the Agreement, Birch shall be responsible for
publishing the required notice and the publication and/or notice costs shall be
borne by Birch.  
   
   
   
   
   
 

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27.  
   
Entire Agreement  
   
   
This Agreement and its Attachments, incorporated herein by this reference, sets
forth the entire understanding and supersedes prior Agreements between the
Parties relating to the subject matter contained herein and merges all prior
discussions between them, and neither Party shall be bound by any definition,
condition, provision, representation, warranty, covenant or promise other than
as expressly stated in this Agreement or as is contemporaneously or subsequently
set forth in writing and executed by a duly authorized officer or representative
of the Party to be bound thereby.  
   
   
This Agreement may include attachments with provisions for the following
services:  
   
   
Network Elements and Other Services
Local Interconnection
Resale
Collocation  
   
   
The following services are included as options for purchase by Birch. Birch
shall elect said services by written request to its Account Manager if
applicable.  
   
   
Optional Daily Usage File (ODUF)
Enhanced Optional Daily Usage File (EODUF)
Access Daily Usage File (ADUF)
Line Information Database (LIDB) Storage
Centralized Message Distribution Service (CMDS)
Calling Name (CNAM)  
   
   
 

    IN WITNESS WHEREOF, the Parties have executed this Agreement the day and
year above first written.

BELLSOUTH TELECOMMUNICATIONS, INC.   BIRCH TELECOM OF THE SOUTH, INC.  

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Signature   Signature  
Jerry D. Hendrix  
   
 

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Name   Name  
Sr. Director—Interconnection Services  
   
 

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Title   Title  

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Date   Date

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Definitions

    Affiliate is defined as a person that (directly or indirectly) owns or
controls, is owned or controlled by, or is under common ownership or control
with, another person. For purposes of this paragraph, the term "own" means to
own an equity interest (or equivalent thereof) of more than 10 percent.

    Centralized Message Distribution System is the Telcordia (formerly BellCore)
administered national system, based in Kansas City, Missouri, used to exchange
Exchange Message Interface (EMI) formatted data among host companies.

    Commission is defined as the appropriate regulatory agency in each of
BellSouth's nine state region, Alabama, Florida, Georgia, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina, and Tennessee.

    Daily Usage File is the compilation of messages or copies of messages in
standard Exchange Message Interface (EMI) format exchanged from BellSouth to a
CLEC.

    Exchange Message Interface is the nationally administered standard format
for the exchange of data among the Exchange Carriers within the
telecommunications industry.

    Information Service means the offering of a capability for generating,
acquiring, storing, transforming, processing, retrieving, utilizing, or making
available information via telecommunications, and includes electronic
publishing, but does not include any use of any such capability for the
management, control, or operation of a telecommunications system or the
management of a telecommunications service.

    Intercompany Settlements (ICS) is the revenue associated with charges billed
by a company other than the company in whose service area such charges were
incurred. ICS on a national level includes third number and credit card calls
and is administered by Telcordia (formerly BellCore)'s Calling Card and Third
Number Settlement System (CATS). Included is traffic that originates in one
Regional Bell Operating Company's (RBOC) territory and bills in another RBOC's
territory.

    Intermediary function is defined as the delivery of traffic from Birch; a
CLEC other than Birch or another telecommunications carrier through the network
of BellSouth or Birch to an end user of Birch; a CLEC other than Birch or
another telecommunications carrier.

    Local Interconnection is defined as 1) the delivery of local traffic to be
terminated on each Party's local network so that end users of either Party have
the ability to reach end users of the other Party without the use of any access
code or substantial delay in the processing of the call; 2) the LEC network
features, functions, and capabilities set forth in this Agreement; and
3) Service Provider Number Portability sometimes referred to as temporary
telephone number portability to be implemented pursuant to the terms of this
Agreement.

    Local Traffic is defined as in Attachment 3.

    Message Distribution is routing determination and subsequent delivery of
message data from one company to another. Also included is the interface
function with CMDS, where appropriate.

    Multiple Exchange Carrier Access Billing ("MECAB") means the document
prepared by the Billing Committee of the Ordering and Billing Forum ("OBF:),
which functions under the auspices of the Carrier Liaison Committee of the
Alliance for Telecommunications Industry Solutions ("ATIS") and by Telcordia
(formerly BellCore) as Special Report SR-BDS-000983, Containing the recommended
guidelines for the billing of Exchange Service access provided by two or more
LECs and/or CLECs or by one LEC in two or more states within a single LATA.

    Network Element is defined to mean a facility or equipment used in the
provision of a telecommunications service. Such term may include, but is not
limited to, features, functions, and capabilities that are provided by means of
such facility or equipment, including but not limited to, subscriber numbers,
databases, signaling systems, and information sufficient for billing and
collection or

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used in the transmission, routing, or other provision of a telecommunications
service. BellSouth offers access to the Network Elements, unbundled loops;
network interface device; sub-loop elements; local switching; transport; tandem
switching; operator systems; signaling; access to call-related databases; dark
fiber as set forth in Attachment 2 of this Agreement.

    Non-Intercompany Settlement System (NICS) is the Telcordia (formerly
BellCore) system that calculates non-intercompany settlements amounts due from
one company to another within the same RBOC region. It includes credit card,
third number and collect messages.

    Percent of Interstate Usage (PIU) is defined as a factor to be applied to
terminating access services minutes of use to obtain those minutes that should
be rated as interstate access services minutes of use. The numerator includes
all interstate "non-intermediary" minutes of use, including interstate minutes
of use that are forwarded due to service provider number portability less any
interstate minutes of use for Terminating Party Pays services, such as 800
Services. The denominator includes all "non-intermediary", local, interstate,
intrastate, toll and access minutes of use adjusted for service provider number
portability less all minutes attributable to terminating Party pays services.

    Percent Local Usage (PLU) is defined as a factor to be applied to intrastate
terminating minutes of use. The numerator shall include all "non-intermediary"
local minutes of use adjusted for those minutes of use that only apply local due
to Service Provider Number Portability. The denominator is the total intrastate
minutes of use including local, intrastate toll, and access, adjusted for
Service Provider Number Portability less intrastate terminating Party pays
minutes of use.

    Revenue Accounting Office (RAO) Status Company is a local exchange
company/alternate local exchange company that has been assigned a unique RAO
code. Message data exchanged among RAO status companies is grouped (i.e. packed)
according to From/To/Bill RAO combinations.

    Service Control Points ("SCPs") are defined as databases that store
information and have the ability to manipulate data required to offer particular
services.

    Signal Transfer Points ("STPs") are signaling message switches that
interconnect Signaling Links to route signaling messages between switches and
databases. STPs enable the exchange of Signaling System 7 ("SS7") messages
between switching elements, database elements and STPs. STPs provide access to
various BellSouth and third party network elements such as local switching and
databases.

    Signaling links are dedicated transmission paths carrying signaling messages
between carrier switches and signaling networks. Signal Link Transport is a set
of two or four dedicated 56 kbps transmission paths between Birch designated
Signaling Points of Interconnection that provide a diverse transmission path and
cross connect to a BellSouth Signal Transfer Point.

    Telecommunications means the transmission, between or among points specified
by the user, of information of the user's choosing, without change in the form
or content of the information as sent and received.

    Telecommunications Service means the offering of telecommunications for a
fee directly to the public, or to such classes of users as to be effectively
available directly to the public, regardless of the facilities used.

    Telecommunications Act of 1996 ("Act") means Public Law 104-104 of the
United States Congress effective February 8, 1996. The Act amended the
Communications Act of 1934 (47, U.S.C. Section 1 et. seq.).

    Wire Center denotes a building or space within a building a building which
serves as an aggregation point on a given carrier's network, where transmission
facilities and circuits are connected or switched. Wire Center can also denote a
building in which one or more Central Offices, used for the provision of basic
exchange services and Switched access service, are located.

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QUICKLINKS

EXHIBIT 10.38