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                                                                   EXHIBIT 10.17


                                                                     [AT&T LOGO]
--------------------------------------------------------------------------------
Harold W. Burlingame                                     Room 4349L1
Executive Vice President                                 295 North Maple Avenue
                                                         Basking Ridge, NJ 07920
                                                         908 221-6033


January 3, 2000

CONFIDENTIAL


Michael Keith
4 Tall Oaks Court
Mendham, NJ 07945

Re:  Special Retention Agreement

Dear Michael:

This letter agreement (this "Agreement") confirms the terms and conditions of a
special retention arrangement that AT&T Corp. (the "Company") is pleased to
offer you in recognition of your excellent and dedicated service to the Company.

1.   Job Responsibilities. As a result of changes in the AT&T (the Company)
     business structure you will be in a new role working on the development of
     the second and third tier marketing strategy and opportunities in the
     fixed wireless market. The Company will develop a new position for you
     (the "New Position") which will be consistent with the position of
     Executive Vice President of the Wireless group and take into account your
     qualifications and experience. The development of those responsibilities
     and new position will be defined no later than July 31, 2000. You will
     initially report to John Zeglis, Chief Executive Officer of the Wireless
     Group. During the term of this Agreement you will hold jobs of scope and
     responsibility similar to that of the Executive Vice President of the
     Wireless group.

     It is agreed and understood that during the period of time through
     December 1, 2002, your total annual compensation (i.e., the sum of annual
     base salary rate-target annual incentive-currently 90% of base pay, and
     target "Long Term" incentive-currently 300% of base pay) will not be
     reduced. Accordingly, your total annual compensation will not be reduced
     below its current level of 2 million dollars per year. Similarly, your
     annual base salary will not be reduced below its current level of
     $425,000. A reduction in either base salary or total annual compensation
     as defined in Paragraph 5(ii) will meet the definition of "Good Reason"
     (as defined in Paragraph 5) and you would be able to terminate your
     employment under the terms and conditions of Paragraph 3 of this Agreement.

2.   If you terminate your employment anytime before December 1, 2002, for any
     reason other than for Good Reason, you will be entitled to receive the
     following
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                                    -2-                          January 3, 2000

     special severance benefits after the effective date of your termination
     (your "termination date"):

     (i)    Severance. The Company will pay you from its general assets a
            severance payment in the gross amount equal to two times the sum of
            (A) your then-current annual base salary, and (B) the targeted
            amount of your short term bonus for the period in which your
            termination date occurs. Such payment will be made in a lump sum as
            soon as practicable following your termination date, or may be
            deferred by you in accordance with the terms and conditions set
            forth in Exhibit A attached hereto.

     (ii)   Prorated Short-Term Bonus. The Company will pay you from its general
            assets an amount equal to your targeted short term bonus prorated
            for your service during the performance period in which your
            termination date occurs. Such payment will be made in a lump sum as
            soon as practicable following your termination date.

     (iii)  Standard Equity Awards. Any Company stock options and performance
            shares/stock units that were awarded to you as part of the Company's
            standard annual long-term incentive award program and are
            outstanding as of your termination date shall continue to vest and
            be exercisable (as applicable) following your termination date, as
            if you were eligible for retirement-related benefits (or, in the
            case of your pre-1998 awards, as if you were Service Pension
            eligible within the meaning of the AT&T Management Pension Plan as
            in effect on July 31, 1997).

     (iv)   Special Supplemental Retention/Retirement Deferrals. You will
            forfeit all amounts in your supplemental retirement
            arrangement/Deferred Account that is described in Exhibit B
            attached hereto.

     (v)    Special Equity Awards. You will forfeit any nonvested restricted
            stock units, special stock options, and other special equity awards
            (collectively, "Nonvested Special Awards") that have been or may be
            granted to you prior to your termination date (including, but not
            limited to, the special September 1, 1998, award that was granted to
            you).

     (vi)   Post Termination Medical Coverage. In the event such termination
            occurs in 2000 you will be eligible for retiree medical coverage by
            virtue of the Rule of 65. In the event such termination does not
            occur in 2000, you will be eligible for retiree medical coverage, if
            as of your termination date you satisfy the conditions for such
            coverage under the Company's retiree medical plan. If you do not
            satisfy such conditions, the Company will pay your costs for
            continued medical coverage for you and your eligible dependents
            under the Company's active employee medical plan (as amended from
            time to time) pursuant to the Consolidated Omnibus Budget
            Reconciliation Act of 1985, as amended ("COBRA"), for up to 18
            months. Thereafter, you will be eligible for continued medical
            coverage under the Company's Senior Management Separation Medical
            Plan, as amended from time to time, subject to your

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                                      -3-                       January 3, 2000


            making any require premium payments and satisfying any other terms
            and conditions thereunder.

     (vii)  Life Insurance. The Company will provide you, for the remainder of
            your life, with continued life insurance coverage equal to one times
            your annual base salary in effect as of your termination date. AT&T
            shall pay a lump sum payment equal to the present value of the
            additional future premiums (determined by AT&T's actuaries) which,
            together with the cash value of the policy as of your termination
            date, are estimated to be necessary to provide paid-up coverage for
            the remainder of your lifetime equal to one times annual base pay
            (rounded to the next highest $1,000), determined as of your
            termination date. AT&T shall provide you an additional payment
            estimated to equal the federal income and FICA taxes to be incurred
            by you by reason of such lump sum payment, calculated in accordance
            with AT&T's current practice for senior management employees. You
            shall not be entitled to any additional or future payments from the
            Company under the AT&T Senior Management Universal Life Insurance
            Plan.

     (viii) Financial Counseling. The Company will pay the cost of financial
            counseling (or provide a lump sum payment to you) for you for a
            period of two years from your termination date (including income tax
            preparation during the subsequent calendar year with respect to
            income tax returns for the calendar year which includes the second
            anniversary of your termination date), in accordance with the
            Company's then-current Senior Management Financial Counseling
            Program.

     (ix)   Outplacement Counseling. The Company will provide you, if you so
            elect within one year after your termination date, with outplacement
            counseling from a firm selected by the Company, in accordance with
            the practice in effect for then-current senior management employees
            as of your termination date.

3.   Termination after December 1, 1999, and before December 1, 2002 for Good
     Reason or for Company Initiated Termination for Other than Cause. If (a)
     you terminate your employment anytime after December 1, 1999, and before
     December 1, 2002, for Good Reason, or (b) the Company terminates your
     employment anytime after December 1, 1999, and before December 1, 2002,
     other than for Cause, you will be entitled to receive the following special
     severance benefits:

     (i)    Severance. The Company will pay you from its general assets a
            severance payment in the gross amount equal to two times the sum of
            (A) your then-current annual base salary, and (B) the targeted
            amount of your short term bonus for the period in which your
            termination date occurs. Such payment will be made in a lump sum as
            soon as practicable following your termination date, or may be
            deferred by you in accordance with the terms and conditions set
            forth in Exhibit A attached hereto.
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                                      -4-                        January 3, 2000


     (ii)   Prorated Short-Term Bonus. The Company will pay you from its general
            assets a prorated amount of your targeted short term bonus for the
            period in which your termination date occurs. Such payment will be
            made in a lump sum as soon as practicable following your termination
            date.

     (iii)  Standard Equity Awards. Any Company stock options and performance
            shares/stock units that were awarded to you as part of the Company's
            standard annual long-term incentive award program and are
            outstanding as of your termination date shall continue to vest and
            be exercisable (as applicable) following your termination date, as
            if you were eligible for retirement-related benefits (or, in the
            case of your pre-1998 awards, as if you were Service Pension
            eligible within the meaning of the AT&T Management Pension Plan as
            in effect on July 31, 1997).

     (iv)   Special Supplemental Retention/Retirement Deferrals. All amounts
            credited to the special supplemental retirement arrangment/Deferred
            Account through the sixth anniversary of the Effective Date of such
            Deferred Account shall be paid to you (or to your Survivors) within
            the calendar quarter immediately following the quarter which
            includes such sixth anniversary.

     (v)    Special Equity Awards. You will forfeit any Nonvested Special
            Awards that have been or may be granted to you prior to your
            termination date (including, but not limited to, the special
            September 1, 1998, award that was granted to you), unless you are
            eligible for retirement-related benefits as of your termination
            date, and the terms and conditions of such awards provide for
            continuation because you are eligible for retirement-related
            benefits.

     (vi)   Post-Termination Medical Coverage. In the event such termination
            occurs in 2000 you will be eligible for retiree medical coverage by
            virtue of the Rule of 65. In the event such termination does not
            occur in 2000, you will be eligible for retiree medical coverage, if
            as of your termination date you satisfy the conditions for such
            coverage under the Company's retiree medical plan. If you do not
            satisfy such conditions, the Company will pay your costs for
            continued medical coverage for you and your eligible dependents
            under the Company's active employee medical plan (as amended from
            time to time) pursuant to the Consolidated Omnibus Budget
            Reconciliation Act of 1985, as amended ("COBRA"), for up to 18
            months. Thereafter, you will be eligible for continued medical
            coverage under the Company's Senior Management Separation Medical
            Plan, as amended from time to time, subject to your making any
            required premium payments and satisfying any other terms and
            conditions thereunder.

     (vii)  Life Insurance. The Company will provide you, for the remainder
            of your life, with continued life insurance coverage equal to two
            and one-half times your annual base salary in effect as of your
            termination date.

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                                      -5-                        January 3, 2000


     (viii) Financial Counseling. The Company will pay the cost of financial
            counseling for you for a period of two years from your termination
            date (including income tax preparation during the subsequent
            calendar year with respect to income tax returns for the calendar
            year which includes the second anniversary of your termination
            date), in accordance with the Company's then-current Senior
            Management Financial Counseling Program.

     (ix)   Outplacement Counseling. The Company will provide you, if you so
            elect within one year after your termination date, with outplacement
            counseling from a firm selected by the Company, in accordance with
            the practice in effect for then-current senior management employees
            as of your termination date.

     (x)    Telephone Reimbursement. You will continue to be eligible for
            telephone reimbursement through the Senior Management Telephone
            Reimbursement Program under the same terms and conditions that apply
            to senior managers who are Service Pension eligible.

4.   Termination Anytime for Cause; Termination after November 30, 2002 for Any
     Reason. You shall not be entitled to receive any of the payments or
     benefits described in this Agreement, and shall have no other rights
     hereunder, if (a) the Company terminates your employment anytime for Cause,
     or (b) you or the Company terminate your employment anytime after November
     30, 2002, for any reason. Provided, however, your entitlements under the
     Special Supplemental Retention/Retirement Deferral will remain in
     accordance with such arrangement. It is agreed and understood that at the
     expiration of this Agreement some or all of the provisions may be extended
     by mutual consent of you and the Company.

5.   Definitions. For purposes of this Agreement:

     (a)    Good Reason. The termination of your employment for "Good Reason"
            means the termination of your employment, at your initiative, after
            an event constituting "Good Reason" occurs. An event constituting
            "Good Reason" will occur only if (1) any of the events described in
            paragraphs (i), (ii), (iii) or (iv) below occur before December 1,
            2002, without your written consent, (2) you provide written notice
            to the Company's Executive Vice President-Human Resources within 10
            business days after the occurrence of an event that you believe
            constitutes Good Reason, and (3) the Company does not remedy within
            10 business days after receipt of such written notice the event
            specified in your notice as constituting Good Reason. "Good Reason"
            shall mean the occurrence of any of the following events:

            (i)    You are demoted to a position which is not of a rank and
                   responsibility comparable to members of the Company's
                   then-current Operations Group or replacement group (if any)
                   or of the rank and responsibility of a similar governance
                   body as may be applicable; provided, however, that any one or
                   combination of the following shall not constitute Good
                   Reason:





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                              - 6 -                          January 3, 2000

                   (A) A decision by the Company not to continue an Operations
                       Group.

                   (B) A change or changes in your reporting relationships.

                   (C) Any reduction or reductions in your business unit's
                       budget or in your business unit's head count.

            (ii)   There is a reduction in either your annual base salary rate
                   or the sum of your annual base salary rate, target annual
                   incentive award, and target annual long term incentive grants
                   (collectively, your "Total Annual Compensation") for any
                   calendar or fiscal year, as applicable, to an amount that is
                   less than the Total Annual Compensation that existed in the
                   prior calendar or fiscal year, as applicable.

                   For purposes of this paragraph (ii), the dollar value of the
                   target annual long term incentive grants shall exclude the
                   value of any special one-time or periodic long-term incentive
                   grants, and shall be determined by valuing performance
                   shares, stock units, restricted stock, restricted stock
                   units, etc., at the market share price utilized in valuing
                   the annual senior management compensation structures in the
                   materials presented to the Compensation and Employee Benefits
                   Committee of the Company's Board of Directors (the
                   "Committee") when authorizing such grants, and assuming 100%
                   performance achievement if such grants include performance
                   criteria. Stock options and stock appreciation rights will be
                   valued by the Black-Scholes methodology (and related share
                   price) as utilized in the materials presented to the
                   Committee when authorizing such grants.

            (iii)  You are assigned duties and responsibilities which materially
                   diminish the overall scope of the duties and responsibilities
                   of your New Position.

            (iv)   The failure of a successor to assume this Agreement.

                   If the Company disagrees with your determination that the
                   event specified in your notice constitutes Good Reason, the
                   Company will so notify you within ten business days after
                   receipt of your notice.

     (b)    Cause. The termination of your employment for "Cause" means the
            termination of your employment by the Company upon written notice to
            you for any of the events described in paragraphs (i), (ii), (iii),
            or (iv) below.

            (i)    Your conviction (including a plea of guilty or nolo
                   contendere) of a crime involving theft, fraud, dishonesty, or
                   moral turpitude.

            (ii)   Violation by you of the Company's Non-Competition Guideline
                   (attached hereto as Exhibit D) or material violation by you
                   of the Company's Code of Conduct.

            (iii)  Your gross omission or gross dereliction of any statutory,
                   common law, or other duty of loyalty to the Company or any of
                   its affiliates.




<PAGE>   7
                                   - 7 -                    January 3, 2000

     (iv)   Your repeated failure to carry out your job duties despite
            specific instruction to do so; provided, however, that your
            failure to meet specific business objectives despite good
            faith efforts to do so shall not be considered cause for
            purposes of paragraph 4 of this Agreement.

     In the event the Company determines that there is Cause for
     termination of your employment, the Company shall provide you
     with written notice specifying the grounds upon which its
     determination is based.

6.   Confidentiality. You agree never to disclose, whether verbally, in
     writing, electronically, or otherwise, the existence of this
     Agreement or any of its terms, unless required to do so by law. You
     will not talk about, write about, or otherwise disclose the terms or
     existence of this Agreement, unless required by law or to enforce
     the terms of this Agreement You may, however, discuss the contents
     of this Agreement with your spouse, legal and/or financial
     counselor, provided that you advise them of your obligations of
     confidentiality and that any disclosures made by any of them may be
     treated by the Company as disclosures made by you for purposes of
     this provision. Unless disclosure is required in the course of
     performing your duties for the Company, you also agree to maintain
     in confidence all confidential and proprietary information of the
     Company, and not disclose such information to any other party,
     unless required to do so by law or other legal process and then only
     if Employee first gives the Company five (5) business days written
     notice. If the legal process requires disclosure on less than five
     days notice, Employee shall immediately notify AT&T's General
     Counsel and take such steps as are necessary to extend the period
     for response to the legal process to five business days. In all
     cases in which Employee is served with legal process that might
     require disclosure of Proprietary Company Information, Employee
     shall also provide the Company's General Counsel with a copy of the
     legal process so that the Company may take such action as it deems
     appropriate to protect its Proprietary Company Information. As used
     in this Agreement, the term "Proprietary Company Information"
     includes, but is not necessarily limited to, technical, marketing,
     business, financial or other information which constitutes trade
     secret information or information not available to competitors of
     the Company, the use or disclosure of which might reasonably be
     construed to be contrary to the interests of the Company. The term
     "Proprietary Confidential Information" does not include information,
     which is generally available to the public.

7.   Exclusive Severance Benefits. Benefits and payments under this
     Agreement are in lieu of (and you hereby waive any rights you
     otherwise may have under) any other current or future Company plan,
     program, and practice providing severance payment or post-retirement
     ancillary benefits, except as expressly provided otherwise in this
     Agreement. This Agreement reflects the entire agreement regarding
     the terms and conditions of any severance benefits to which you may
     become entitled. Accordingly, it supersedes and completely replaces
     any prior oral or written communication on this subject.



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                                      -8-

                                                                 January 3, 2000

8.   Employment-at-Will. This Agreement is not an employment contract and
     should not be construed or interpreted as containing any guarantee
     of continued employment. The employment relationship at the Company
     is by mutual consent (employment-at-will). This means that employees
     have the right to terminate their employment at any time and for any
     (or no) reason. Likewise, the Company reserves the right to
     discontinue your employment with or without cause at any time and
     for any (or no) reason. The Company's various employee and executive
     benefit and incentive plans, programs, and practices (as may be
     mentioned in this Agreement), including, but not limited to, the
     Company's retiree medical plans, reflect their current provisions.
     The Company reserves the right to discontinue or modify any such
     plans, programs, and practices at any time.

9.   Noncompetition. In consideration of receiving any benefits under
     this Agreement, you agree that during your employment with the
     Company and for a period of twenty-four months following the
     termination of your employment by the Company, you will not directly
     or indirectly (whether as an officer, director, employee, sole
     proprietor, consultant, partner, venturer, or shareholder, or in any
     other capacity as principal or agent), do any of the following:

     (a)    Engage in any business which competes directly or indirectly
            with any business in which the Company is engaged.

     (b)    Take any action to finance, guarantee, or provide any other
            material assistance to any person, firm, partnership,
            corporation, or other entity which engages in any business
            which competes directly or indirectly with any business in
            which the Company is engaged.

     (c)    Influence or attempt to influence any person, firm,
            partnership, corporation, or other entity that engages in any
            business which competes directly or indirectly with any
            business in which the Company is engaged to terminate any
            written agreement with the Company.
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                                      -9-

                                                                 January 3, 2000

     (d) Hire or attempt to hire any person who is employed by the Company, or
         attempt to influence any such person to terminate such employment.

     (e) Solicit or take away, or attempt to solicit or take away, as a client
         or customer any person, firm, partnership, corporation, or other entity
         that is or was a client or customer of the Company, including actively
         sought prospective customers.

The foregoing is not intended to prevent you from owning an equity interest in
any corporation that is listed on a recognized securities exchange or traded in
the over-the-counter market, to the extent that such interest does not exceed
2% of the value or voting power of such corporation and does not constitute
control of such corporation. Furthermore, in accordance with the provisions of
Section 5 of the Non-Competition Guideline, you may apply to the Executive Vice
President -- Human Resources for consent to compete (par. 9) or for a waiver of
the operation of the Guideline (par. 10) on the grounds set forth in the
Guideline and on the ground that your contemplated activity or relationship
will not adversely impact the Company and is not within the spirit and intent
of the Guideline. The Executive Vice President -- Human Resources shall
evaluate your application, using reasonable judgment. In exercising the
discretion granted him/her pursuant to paragraphs 9 and 10 of Section 5 of the
Guideline, the Executive Vice President shall not unreasonably deny your
application.

You should also be aware that a number of the Company's senior management plans
are also subject to non competition constraints.

10.  Breach. The Company shall be entitled to injunctive relief in any court
     of competent jurisdiction for any actual or threatened violation of the
     Confidentiality and Noncompetition provisions set forth in this Agreement,
     in addition to any other remedies the Company may have. Any breach by you
     of such Confidentiality and Noncompetition provisions also will relieve the
     Company of all obligations to make any further payments to you pursuant to
     this Agreement, and shall require your repayment of any payments made
     hereunder. These remedies are in addition to any other remedies the Company
     may have with respect to any such breach.

11.  Additional Conditions. The payments and benefits set forth in this
     Agreement are (a) subject to wage reporting and withholding for applicable
     taxes, and (b) contingent upon your signing at your termination of
     employment, and not subsequently revoking, a valid Waiver and General
     Release in form and substance substantially similar to the one attached to
     this Agreement as Exhibit C.

12.  Except as specifically set forth in this Special Retention Agreement, in
     connection with signing the Waiver and General Release described in
     paragraph 11, you will waive any and all claims to salary, incentives,
     payments or benefits of any kind, other than those payments and benefits
     payable to you or your survivors under the following plans/programs under
     which you may be covered and/or may have chosen to participate: (1) AT&T
     Management Pension Plan, (2) AT&T Non-Qualified Pension Plan, (3) AT&T
     Excess Benefit Compensation Plan, (4) AT&T Senior

<PAGE>   10
                                     - 10 -                      January 3, 2000

     Management Incentive Award Deferral Plan, (5) AT&T Long Term Savings Plan
     for Management Employees, (6) AT&T 1987 Long Term Incentive Program, (7)
     AT&T 1997 Long Term Incentive Program, (8) AT&T Senior Management
     Universal Life Insurance Program, (9) AT&T Senior Management Telephone
     Concession Program, (10) continuation rights for employee-paid coverage
     under the AT&T Supplementary Variable Universal Life Insurance Program,
     (11) AT&T Medical Expense Plan for Retired Employees, (12) Dental Expense
     Plan for Retired Employees, (13) Employee Stock Ownership and 1996 Stock
     Purchase Plans, all the above in accordance with and subject to the terms
     and conditions of each applicable plan, program or practice, as such may
     be constituted from time-to-time. In addition, nothing in the Waiver and
     General Release shall affect your rights to indemnification as a former
     officer and employee of the Company.

13.  Attorney's Fees. In the event you bring an action to enforce the terms of
     this Agreement and prevail in any such action, the Company will pay your
     reasonable attorney's fees and costs in any such action.


Michael, we have valued your many contributions to the success of the Company,
and believe that the arrangement described in this Agreement provides you with
the appropriate incentives to remain with the Company.

If you agree with the foregoing, please sign this Agreement in the space
provided below and return the signed original to me for our files. You should
retain the enclosed copy of this Agreement for your records. Please do not
hesitate to call me or Paula Pilewicz if you have any questions.

I look forward to hearing from you.


Sincerely,

/s/ Hal Burlingame


cc: P. Pilewicz


Acknowledged and Agreed

/s/ Michael G. Keith                    1/5/2000
--------------------                    --------
Michael G. Keith                        Date