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                                                                   EXHIBIT 10.10


August 8, 1995

Mr. Donald K. Peterson
11 Breckenridge
Nashville, TN 37215


     Dear Don,

     This offer letter completely replaces my offers of employment dated July
28 and August 2, 1995 and supersedes all other oral and written communications
on this subject.

     It gives me great pleasure to offer you a Senior Management position
within AT&T (the Company). In addition to confirming my offer, this letter will
detail the terms and conditions of your employment and outline the current
major features of AT&T's compensation and benefit plans and practices.

     Assumption of Duties: Effective on or about September 1, 1995, you will
assume the position of CFO within the Communications Services with a dual
reporting relationship to Alex Mandl, Executive Vice President AT&T and CEO
Communications Services Group and to Rick Miller, Executive Vice President AT&T
and Chief Financial Officer.

     Base Salary: Your initial base salary will be $325,000 per year. This rate
will increase annually to reflect individual performance and base salary
structure changes applicable to similarly situated Senior Managers. Your first
review for your base salary level will be effective January 1996.

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         Annual Incentive: The annual incentives for Senior Managers currently
take the form of (1) AT&T Performance Award (APA), (2) Merit Award (MA), and (3)
Unit Performance Award (UPA).

         (1) AT&T Performance Award (APA) is predicated on corporate
performance.

         (2) Merit Award (MA) is driven by individual and team
contributions.

         (3) Unit Performance Award (UPA) is predicated on your
organization meeting its financial targets.

         Except as reflected below in the "Guaranteed 1995 Annual Incentive"
provision, the Company cannot make any definitive representations regarding the
continuation of the APA/MA/UPA format or the size of individual awards under
these plans. The following information, however, will provide a frame of
reference regarding the potential size of your annual incentive. Based on your
initial base salary, your 1995 target (not actual) APA/MA is $113,000 and your
target (not actual) UPA is $61,000. These awards are payable in the first
quarter of 1996 and will be prorated to reflect partial 1995 service.

Guaranteed 1995 Annual Incentive Amount: In the event that your earned prorated
1995 APA/MA/UPA (see above provision) is less than $58,000 (assuming a September
1, 1995 start date), you will be provided a lump sum that, when combined with
your actual earned APA/MA/UPA, will total $58,000. In the event that your earned
prorated 1995 APA/MA/UPA is higher than $58,000, you would receive that higher
amount and no lump sum would be payable under this Guaranteed 1995 Annual
Incentive Amount provision.

It is understood that this minimum guaranteed incentive award for performance
year 1995 shall not in any way be construed as a precedent for future
performance years.

AT&T Long Term Incentives:

--AT&T Performance Shares: Effective on your date of hire, you will receive
2,366 AT&T Performance Shares covering the 1995-97 performance period (payout,
if any, is in the first quarter of 1998). This is the 1995 standard grant for
your Senior Management position. Historically, such awards have been made
annually. Performance shares, which are equivalent in value to AT&T common
shares, are awarded based on position rate at the beginning of a three-year
performance period. Payout of from 0% to 150% of such Performance Shares is made
in the form of cash and/or AT&T shares at
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the end of the performance period based on the Company's return to equity
performance as approved annually by the Board of Directors. Dividend equivalents
are paid quarterly on all undistributed Performance Shares.

--AT&T Stock Options: Effective on the date of your hire, you will be awarded
8,256 AT&T Stock Options. This is the 1995 standard grant for your Senior
Management position. Historically, standard stock option grants have been made
in

January of each year to Senior Managers. Currently, the term of the stock
option grant is ten years. Assuming continued Company employment, stock
options vest as follows: one-third of the options will vest on the first
anniversary of the date of grant, one-third on the second anniversary,
and
one-third on the third anniversary of the date of grant. The option price
is 100% of market price on date of grant, e.g., your date of hire for the
1995 award. As with the Annual Incentive Awards, Long Term Incentives are
closely liked with the Company's strategy to meet the challenges of an ever
changing marketplace. Accordingly, other than the initial grant, the Company
cannot guarantee continuation of the Long Term Incentive Plan in its current
format, nor can it guarantee annual grant levels to individual
participants.

Hiring Bonus: In order to address certain forfeitures, (e.g., Stock Options)
prompted by leaving your current employer and to incent you to join AT&T, the
Company will provide you with the following:

(I) You will be granted the following "Seasoned" AT&T Performance Shares under
the Company's Long Term Incentive Program:

-- 2,366 AT&T Performance Shares (1993-95 Performance Period, payable in 1996)

-- 2,366 AT&T Performance Shares (1994-96 Performance Period, payable in 1997)

Dividend equivalent payments will be made on the above Performance Share awards.

(II) You will be provided a one-time cash hiring bonus of $111,000 payable
within 30 days of your date of hire.

(III) You will receive a one-time "extra" (over and above the standard annual
award) grant of 24,100 AT&T Stock Options. These "extra" Stock Options will
cliff vest at the end of three years of employment with the Company.

(IV) In the event you forfeit your 1995 annual bonus (payable in 1996) from your
current employer, you will receive a one-time cash payment related to the amount
forfeited, (where the amount forfeited is based on the actual months of
employment at this employer during 1995). Based on
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an August 31, 1995 termination from your current employer, and an above target
payout of $166,000, this cash payment would be $111,000. Such amount will be
payable within 30 days of your date of hire.

(V) The Company will provide you a housing loan up to $250,000 on terms which
are generally comparable to those provided by your current employer.

(VI) In the event you are prevented from exercising your vested stock options
(or are required to repay to your current employer the bargain spread on such
options), the Company will reimburse you up to $89,000 for such forfeiture.

Severance Benefit: In the event of any Company initiated termination other than
for disability or for "cause" (as defined below), within 36 months from the
effective date of your employment you will be entitled to a payment equal to the
higher of (1) $650,000 or (2) 200% of your annual base salary in effect on the
date of such termination, such payment to be made in the month following the
month of termination.

Such payment as described above in this Severance Benefit provision as well as
any "DCA" benefits payable to you under the "Special Deferred Compensation
Account" provision (below) related to a Company initiated termination, will be
conditioned upon you signing a release and agreement not to sue the Company. The
form of this release and agreement will be that then in use for AT&T Senior
Managers.

For purposes of this employment letter, "cause" shall be defined as follows: (1)
your conviction (including a plea of guilty to nolo contendere) of a felony or
any crime of theft, dishonesty or moral turpitude; or (2) gross omission or
gross dereliction of any statutory or common law duty of loyalty to the Company,
or (3) violation of the Company's Code of Conduct.

Senior Management Employee Benefit Plans: Attachment A outlines the benefits
available to you under various Senior Management, mid-career and employee
benefit plans, programs and practices. In addition, under the provisions of the
Mid-Career Hire Program you will be eligible for the following benefits:

Mid-Career Pension: Managers hired at age thirty-five and over at salary band D
and above who retire or terminate employment at Executive level or above will be
eligible for supplemental pension benefits from the AT&T Mid-Career Hire Pension
Plan provided they have at least five years service credited while at or above
Executive level. (The Senior Management position you would be hired into is
above the Executive level). These supplemental pension payments are in addition
to those provided by other
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existing plans. For example: under the Plan's current terms and conditions, a
participant hired at age 46 and retired at age 65 would receive extra pension
credit for 16 years at approximately one half the rate under the AT&T Management
Pension Plan.

Special Deferred Compensation Account: Beginning on your date of hire, $190,000
will be credited in your name in an individual Deferred Compensation Account
(DCA). You will have no ownership interest in the DCA nor in any asset of the
Company and you may not assign or pledge the DCA. You will have no right to
receive any part of the DCA except as provided below under the "Vesting,
Forfeiture, and Distribution of DCA" paragraphs. Such credited DCA shall bear
interest from the first day following the effective date of your AT&T
employment. The interest credited thereon will be compounded as of the end of
each calendar quarter for as long as any sums remain in the DCA, and the
quarterly rate of interest applied at the end of any calendar quarter shall be
one-quarter of the average 30-year Treasury Note rate for the previous quarter.

          Vesting, Forfeiture, and Distribution of DCA: In the event of your
termination of employment prior to August 13, 2009, for any reason other than
death, "long term disability" (as defined below), or Company initiated
termination for other than "cause" (as defined below), all amounts credited to
your DCA will be canceled, and you will not receive any distribution from the
DCA.

          In the event of your termination of employment, prior to August 13,
2009, because of death or "long term disability," the amount credited to your
DCA as of such termination will become vested. Your DCA balance as of your date
of death or termination will be distributed to you, or in the case of death, to
your designated beneficiary (or to your estate if no beneficiary has
designated), within 30 business days after your termination or death.

          In the event of your termination of employment from your date of hire
to August 13, 2009, as a result of a Company initiated termination for other
than "cause" (as defined below), your DCA will vest in full at such date and all
amounts credited to the DCA as of your termination of employment will be
distributed to you within 30 business days after your termination of employment.
As of August 13, 2009, all amounts then credited to your DCA will vest in full,
assuming your continued employment to such date with the Company or any
affiliate of the Company. Any amounts credited to your DCA subsequent to August
13, 2009 will vest as credited.

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          In the event of your termination of employment on or subsequent to
August 13, 2009, because of death all amounts credited to your DCA as of your
date of death will be distributed to your designated beneficiary (or to your
estate if no beneficiary has been designated), within 30 business days after
your death.

          In the event of your termination of employment on or subsequent to
August 13, 2009, for any reason other than for death, then all amounts credited
to your DCA as of your termination of employment will be distributed to you in
ten approximately equal annual installments. Interest will continue to be
credited on the outstanding balance in your DCA.

          Notwithstanding any other provision of this Special Deferred
Compensation Account, in the event of your termination of employment for
"cause", at any time from your date of hire to August 13, 2009, all amounts
credited to your DCA will be canceled and forfeited in their entirety, and you
will not receive any distribution from the DCA. For purposes of this DCA
provision, "cause" shall be as defined in the Severance Benefit provision above.
For purposes of this DCA provision, "long term disability" will mean your
termination of Company employment with eligibility to receive long term
disability benefits under the AT&T Long Term Disability Plan for Salaried
Employees or a replacement or comparable affiliate plan.

          The payments from the DCA are in addition to and not in lieu of any
pension, savings or other defined benefit or defined contribution type
retirement plans of the Company in which you would be eligible to participate as
an AT&T employee or AT&T Senior Manager. Accordingly, the DCA will not affect
your participation or potential participation in such plans. The DCA, however,
is not includable in the base for calculating any AT&T employee or Senior
Manager benefits.

          Payout of the DCA, when payable in ten installments, will commence on
the first day of the calendar quarter next following the end of the month in
which you terminate employment.

Relocation Plan: You will be eligible for the same AT&T Management
Relocation Plan (AT&TMRP) benefits accorded to other management employees
(Attachment B). It is understood that your family will be remaining in
Tennessee through June 1996. Therefore, effective with your month of
hire, you will be paid a monthly amount of $6,000 (100% taxable). These monthly
payments will cease after the earlier of (1) July 31, 1996 or (2) the month
you relocate to your New Jersey residence. It is understood and agreed that
these monthly payments will be made in lieu of the Lump Sum Payment

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(for interim living, home search, etc.) provided for in the AT&TMRP (see
Attachment B).

          It is agreed and understood that you will not talk about, write about
or otherwise disclose the terms of existence of this employment letter or any
fact concerning its negotiation or implementation. You may, however, discuss the
contents of this letter with your spouse, legal and/or financial counselor.

          As indicated in the attached AT&T Non-Competition Guideline
(Attachment C), a number of AT&T incentive arrangements and non-qualified
pension and benefit plans are subject to non-competition constraints.

          This offer is contingent upon successful completion of AT&T's
pre-employment medical review process. This letter reflects the entire agreement
regarding the terms and conditions of your employment. Accordingly, it
supersedes and completely replaces any prior oral or written communication on
this subject.

          This letter is not an employment D.K. Peterson - Page 7 contract and
should not be construed or interpreted as containing any guarantee of continued
employment. The employment relationship at AT&T is by mutual consent
("Employment-At-Will"). This means that managers have the right to terminate
their employment at any time and for any reason. Likewise, the Company reserves
the right to discontinue your employment with or without cause at any time and
for any reason.

          The incentive plans as well as the employee and Senior Management
benefit plans, programs and practices as briefly outlined in this letter,
reflect their current provisions. Payments and benefits under these plans and
programs, as well as other payments referred to in this letter, are subject to
IRS rules and regulations with respect to withholding, reporting, and taxation,
and will not be grossed-up unless specifically stated. The Company reserves the
right to discontinue or modify any such plans, programs and practices. Moreover,
the summaries contained herein are subject to the terms of such plans, programs
and practices.

          For purposes of the Senior Management and employee benefits plans, the
definition of compensation is as stated in the plans. Currently, pensions are
based on base salary and annual incentives. Other benefits are based on either
base salary or base salary plus annual incentives. All other compensation and
payments reflected in this offer, e.g., hiring bonus, relocation, long term
incentives, are not included in the calculation of any employee or Senior
Management benefits (except for the AT&T Incentive Deferral Award Plan, which
currently permits the deferral of annual incentives and Performance Shares).

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          By acceptance of this offer, you agree that (1) no trade secret or
proprietary information belonging to your previous employer will be disclosed or
used by you at AT&T, and that no such information, whether in the form of
documents, memoranda, software, drawings, etc., will be retained by you or
brought with your to AT&T, and (2) you have brought to AT&T's attention and
provided it with a copy of any agreement which may impact your future employment
at AT&T, including non-disclosure, non-competition, invention assignment
agreements or agreements containing future work restrictions.

          Don, I feel the package we have developed for you is attractive and
anticipates that you will make a critical contribution to the business as it
develops over the coming years. We look forward to having you join us. If you
have any questions, please don't hesitate to call me or Marty O'Donnell on
(908) 221-3596.

          If you agree with the foregoing, and affirm that there are no
agreements or other impediments not disclosed to AT&T that would prevent you
from providing exclusive service to the Company, please sign this letter by
August 11, 1995 in the space provided below and return the original executed
copy to me.


Sincerely,


----------------------------------------------------
          Acknowledged and Agreed to Date
                Donald K. Peterson


Attachments