<PAGE>

[LETTERHEAD]

September 9, 1999

ESSENTIAL.COM
John Duffy
3 Burlington Woods Dr.
4th Flr.
Burlington, MA 01803

John,

Enclosed you will find a copy of the ESSENTIAL.COM resale signature
ready agreement for the state of Texas. Please review the agreement and
let me know if you have any questions. If you are ready to sign the
agreement, sign in the designated places and return the entire
agreement to my office.

Once we receive the signed copy, the President-Industry Markets of
Southwestern Bell will sign it and a copy will be forwarded to you.
Southwestern Bell will file the agreement with the Texas Public
Utilities Commission. If you have any questions in the meantime, please
call me at 214 464-8557 or you can E-mail me at ac9085@txmail.sbc.com.

Sincerely,


/s/ Alex Cedillo
-----------------------------
Alexander (Alex) Cedillo
Account Manager-LPAT
Southwestern Bell



enclosure

<PAGE>

                                                                   PAGE 1 OF 3

                            RESALE AGREEMENT BETWEEN
                       SOUTHWESTERN BELL TELEPHONE COMPANY
                                AND essential.com
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

<S>     <C>                                                                  <C>
I.      DESCRIPTION AND CHARGES FOR SERVICES ..................................1

II.     TERMS AND CONDITIONS FOR RESALE OF SERVICES ...........................3
        A. PERMITTED USE OF RESOLD SERVICES BY CLEC AND ITS END USERS .........3
        B. USE OF SWBT TRADEMARKS .............................................5
        C. NETWORK AND SERVICE ORDER CONDITIONS ...............................5
        D. CUSTOMER SPECIFIC PRICING ..........................................6

III.    ADDITIONAL SERVICES ...................................................7
        A. 911/E911 ...........................................................7
        B. DIALING PARITY .....................................................7
        C. WHITE PAGE DIRECTORIES: LISTINGS,
           DISTRIBUTION AND INFORMATION PAGE ..................................8
        D. DIRECTORY ASSISTANCE (DA) ..........................................9
        E. OPERATOR SERVICES (OS) ............................................10
        F. PAYPHONE SERVICES .................................................10

IV.     RESPONSIBILITIES OF SWBT .............................................10

V.      ADDITIONAL RESPONSIBILITIES OF THE PARTIES ...........................12
        A. COOPERATION ON FRAUD ..............................................12
        B. FILING THE AGREEMENT...............................................12


VI.     CHANGES IN SUBSCRIBER CARRIER SELECTIONS .............................13

VII.    ADDITIONAL RESPONSIBILITIES OF CLEC...................................14
        A. PAYMENT OF RATES AND CHARGES ......................................14
        B. INTERFACES WITH SWBT ..............................................18
        C. REPAIR CONTACT ARRANGEMENTS .......................................19
        D. CLEC OPERATING COMPANY NUMBER (OCN) ...............................19
        E. SPECIAL SERVICE ARRANGEMENTS ......................................19
        F. DEVELOPMENT OF BRANDING AND CUSTOMIZED ROUTING ....................19

VIII.   NONEXCLUSIVITY .......................................................21

IX.     SUPPORT SYSTEMS SERVICES .............................................21
        A. SUPPORT SYSTEMS SERVICES ..........................................21
        B. NETWORK MANAGEMENT CONTROLS .......................................23
        C. LAW ENFORCEMENT AND CIVIL PROCESS..................................23
</TABLE>

<PAGE>

                                                                   PAGE 2 OF 3

<TABLE>
<S>     <C>                                                                  <C>
X.      CALL TRACE............................................................24

XI.     TAXES ................................................................24

XII.    TERMINATION OF SERVICE TO CLEC. ......................................25

XIII.   FORCE MAJEURE ........................................................27

XIV.    LIMITATION OF LIABILITY ..............................................27

XV.     NONDISCLOSURE ........................................................28

XVI.    PUBLICITY ............................................................29

XVII.   ASSIGNMENT ...........................................................29

XVIII.  DISPUTE RESOLUTION ...................................................30
        A. FINALITY OF DISPUTES ..............................................30
        B. ALTERNATIVE TO LITIGATION .........................................30
        C. COMMENCING DISPUTE RESOLUTION .....................................30
        D. INFORMAL RESOLUTION OF DISPUTES ...................................30
        E. FORMAL DISPUTE RESOLUTION .........................................31
        F. ARBITRATION .......................................................32
        G. BILLING DISPUTES...................................................33
        H. NO CONFLICT .......................................................34

XIX.    VERIFICATION REVIEWS .................................................34

XX.     COMPLIANCE WITH LAWS .................................................35

XXI.    CERTIFICATION REQUIREMENTS............................................36

XXII.   INTENTIONALLY LEFT BLANK .............................................36

XXIII.  NOTIFICATION .......................... ..............................36

XXIV.   NOTICES ................................ .............................36

XXV.    BENEFICIARIES ........................................................37

XXVI.   TERM .................................................................37

XXVII.  EFFECTIVE DATE .......................................................38
</TABLE>
<PAGE>
                                                                   PAGE 3 OF 3



<TABLE>
<S>     <C>                                                                  <C>
XXVIII. WAIVER ...............................................................38

XXIX.   DISCLAIMER OF WARRANTIES .............................................38

XXX.    RELATIONSHIP OF THE PARTIES ..........................................38

XXXI.   INTERVENING LAW AND PRESERVATION OF RIGHTS ...........................38

XXXII.  COMPLETE TERMS .......................................................39
</TABLE>

<PAGE>

                                                                   PAGE 1 OF 40

                            RESALE AGREEMENT BETWEEN
                       SOUTHWESTERN BELL TELEPHONE COMPANY
                                AND ESSENTIAL.COM

     This Agreement is between Southwestern Bell Telephone Company ("SWBT"), a
Missouri corporation, and essential.com. ("CLEC"), a Delaware corporation,
(collectively, "the Parties") entered into this__________ day of__________ 1999.

     WHEREAS, pursuant to the Telecommunications Act of 1996 (the "Act"), the
Parties wish to establish terms for the purchase by CLEC of certain SWBT retail
telecommunications services and certain other services for resale by CLEC to its
local exchange end users in the State of Texas. Therefore, the Parties hereby
agree as follows:

     The geographic SCOPE of this Agreement shall include all exchanges served
by SWBT in the state of Texas. This Agreement shall exclusively govern CLEC's
purchases of the services which are the subject of this Agreement, including any
Appendices, Exhibits, Attachments and/or Amendments hereto, in such state. By
entering this Agreement CLEC agrees that it is purchasing services pursuant to
this Agreement and not General Exchange Tariff (HB2128) and shall continue to
abide by all terms of this Agreement unless terminated as provided herein.

I.   DESCRIPTION AND CHARGES FOR SERVICES

     A.   Attached hereto as Exhibit A is a list of Telecommunications Services
          currently available for resale at the wholesale discount rate set by
          the Commission through arbitration, i.e., 21.6% off the retail rate
          for each service. Except as otherwise expressed herein and consistent
          with SWBT's obligation under Sections 251(c)(4)(A) of the Act, CLEC
          may resell other Telecommunications Services offered by SWBT and not
          listed in Exhibit A. Exhibit B contains a list of other services
          available for resale at the discount included in the exhibit.

     B.   SWBT shall make available for resale by CLEC SWBT's Bill Plus or
          Consolidated Billing service at a discount of five percent (5%) off
          SWBT's tariffed rate for each service (or in the event these services
          are not tariffed, at the rate SWBT charges its subscribers).

     C.   SWBT shall make available for resale by CLEC the following SWBT
          services at SWBT's tariffed rate for each service (or in the event a
          service is not tariffed, at the rate SWBT charges its subscribers,
          except as otherwise provided herein):

<PAGE>

                                                                   PAGE 2 OF 40

          - Construction Charges
          - Connections with Terminal Equipment and Communication System
          - Distance Learning
          - Maintenance of Service Charges
          - Suspension Services
          - Telecommunications Service Priority Systems
          - Access Services
          - Cellular Mobile Telephone Interconnection Services
          - Exchange Connection Services
          - Shared Tenant Service
          - 976 Information Delivery Service

     D.   The Distance Learning discount is in addition to the discounts for the
          underlying services provided. Suspension of Service discounts apply to
          the discounted rate for the underlying service. When CLEC resells
          Shared Tenant Service, CLEC will receive the discount associated with
          the underlying service used in the shared tenant arrangement.

     E.   SWBT shall be under no obligation to offer the following for resale:

          - BDS/LAN
          - Customer Provided Equipment
          - Customized Billing Reports
          - InLine -Registered Trademark- Products
          - Inside Wiring
          - Semi-Public Telephone Booths and Enclosures
          - 911 Universal Emergency Number Equipment

     F.   Grandfathered services are also available for resale at the applicable
          wholesale discount to the same customers to which SWBT offers the
          service.

     G.   Telecommunications Services will be resold to CLEC on terms and
          conditions that are reasonable and nondiscriminatory.

     H.   CLEC may offer to resell Customer Initiated Suspension and Restoral
          Service to their end users. SWBT will offer to CLEC Company Initiated
          Suspension service for their own purposes at the SWBT retail tariffed
          rate. Should CLEC choose to suspend their end user through Company
          Initiated Suspension Service, this suspension period shall not exceed
          fifteen (15) calendar days. If CLEC issues a disconnect on their end
          user account within the fifteen (15) day period, appropriate services
          will not be billed for the suspension period. However, should CLEC
          issue a disconnect after the fifteen (15) day suspension period, CLEC
          will be

<PAGE>

                                                                   PAGE 3 OF 40

          responsible for all appropriate charges on the account back to the
          suspension date, Should CLEC restore their end user, restoral charges
          at the SWBT retail tariffed rate will apply and CLEC will be billed
          for the appropriate service from the time of suspension.

II.  TERMS AND CONDITIONS FOR RESALE OF SERVICES

     The following terms and conditions are applicable to all services purchased
     under this Agreement.

     A.   PERMITTED USE OF RESOLD SERVICES BY CLEC AND ITS END USERS

          1.   For services included in this Agreement which are offered through
               tariffs by SWBT to its end users, the rules and regulations
               associated with the applicable State General Exchange Tariff,
               Local Exchange Service Tariff, and the other tariffs for the
               resold service (such tariffs collectively referred to herein as
               "corresponding tariffs"), apply except for applicable resale
               restrictions and except as otherwise provided herein.

          2.   CLEC shall only sell Plexar -R- services to a single end user or
               multiple users on continuous properties.

          3.   Except where otherwise explicitly provided in the corresponding
               tariffs, or except where SWBT permits such sharing by its own end
               users, CLEC shall not permit the sharing of a service by multiple
               end users or the aggregation of traffic from multiple end users
               onto a single service; however, based upon the Commission's
               Arbitration Order, SWBT will not retain its limitation on
               aggregation for purposes of the resale of volume discount offers.

          4.   CLEC shall only resell services purchased under this Agreement to
               the same class of end users to whom SWBT sells such services
               (e.g. residence service shall not be resold to business end
               users). CLEC may only resell Lifeline Assistance, Link-Up, and
               other like services to similarly situated customers who are
               eligible for such services. Further, to the extent CLEC resells
               services that require certification on the part of the buyer,
               CLEC will ensure that the buyer has received proper certification
               and complies with all rules and regulations as established by the
               Commission.

          5.   For purposes of this section, "short term promotions" of
               Telecommunications services are limited in length to no more than
               ninety (90) days for the length of the period during which the

<PAGE>

                                                                   PAGE 4 OF 40

               promotion may be offered to the public, and to no more than
               ninety (90) days for the period during which any and all benefits
               from the promotion must be realized or captured by the
               subscriber, and that the subscriber must begin receiving the
               benefit during the offering period.

               a.   Based upon the Arbitration Order of the Commission, CLEC may
                    obtain the short term promotional service from SWBT for
                    resale but CLEC is not entitled to receive a discount from
                    SWBT off of the promotional rate.

               b.   Retail rates that do not qualify as a short term promotion,
                    i.e., those in excess of 90 days, are the rates to which the
                    respective wholesale discounts in Section 1 apply while they
                    are in effect.

               c.   Nothing in this Agreement shall require SWBT to provide to
                    CLEC promotional service elements that are not
                    Telecommunications Services such as CPE and Inside Wire
                    Maintenance Plans.

          6.   CLEC shall not use a resold service to avoid the rates, terms and
               conditions of SWBT's corresponding tariffs.

          7.   CLEC shall not use resold local exchange telephone service to
               provide access or interconnection services to itself,
               interexchange carriers (IXCs), wireless carriers, competitive
               access providers (CAPs), or other telecommunications providers.
               Provided however, that CLEC may permit its end users to use
               resold local exchange telephone service to access IXCs, wireless
               carriers, CAPs, or other retail telecommunications providers.

          8.   If CLEC is found to be in violation of a provision of this
               Agreement, SWBT shall notify CLEC of the violation in writing of
               the specific provision being violated. At such time, CLEC shall
               have thirty (30) days to correct the violation and notify SWBT in
               writing that the violation has been corrected. SWBT shall then
               bill CLEC for the charges which should have been collected by
               SWBT or the actual revenues collected by CLEC from its end users
               for the stated violation, whichever is greater. If CLEC disputes
               the violation, it shall notify SWBT in writing within fourteen
               (14) days of receipt of notice from SWBT. Disputes shall be
               resolved as outlined in the Dispute Resolution section of the
               Agreement.

<PAGE>

                                                                   PAGE 5 OF 40

          9.   An End User Common Line (EUCL) charge will continue to apply for
               each local exchange line resold under this agreement. All federal
               rules and regulations associated with EUCL charges, as found in
               Tariff FCC 73, also apply. To the extent ordered by the Texas
               Public Utility Commission, the wholesale discount will apply to
               the EUCL.

          10.  To the extent allowable by law, CLEC shall be responsible for
               Primary Interexchange Carrier (PIC) change charges associated
               with such local exchange line. CLEC shall pay for PIC changes at
               the tariffed rate.

          11.  SWBT is not required to make services available for resale at
               wholesale rates to CLEC for its own use or to CLEC's affiliates,
               subsidiaries, predecessors, successors, assignees or anyone or
               any entity claiming by or through CLEC.

     B.   USE OF SWBT TRADEMARKS

          Except where otherwise required by law, CLEC shall not, without SWBT's
          written authorization, offer the services covered by this Agreement
          using the trademarks, service marks, trade names, brand names, logos,
          insignia, symbols or decorative designs of SWBT or its affiliates. Nor
          shall CLEC state or imply that there is any joint business association
          or similar arrangement with SWBT in the provision of
          telecommunications services to CLECs own end users. CLEC may brand
          services included in this Agreement with its own brand name, but SWBT
          shall not be responsible for providing such branding.

     C.   NETWORK AND SERVICE ORDER CONDITIONS

          1.   SWBT shall provide the services covered by this Agreement subject
               to availability of existing facilities and on a nondiscriminatory
               basis with its other customers. CLEC shall resell the services
               provided herein only in those service areas in which such resale
               services or any feature or capability thereof are offered at
               retail by SWBT as the incumbent local exchange carrier to its end
               users.

          2.   When CLEC converts an end user currently receiving noncomplex
               service from the SWBT network, without any changes to SWBT's
               network, and such order requires manual processing by SWBT
               personnel, CLEC will be charged an interim per order (i.e., per
               billable telephone number) conversion charge of $16.65 in Texas.

<PAGE>

                                                                   PAGE 6 OF 40

               Conversion orders processed and completed electronically will be
               charged $5 per order on an interim basis. Complex orders will be
               charged at an interim rate of $52.55 per order. Custom Services
               conversions (e.g. Plexar Custom) will be handled on a Customer
               Specific Proposal basis.

               When CLEC converts an end user's service and adds or changes are
               made to the network, the respective conversion charge will apply,
               as well as any normal service order charges associated with said
               changes. All non-recurring service connection charges, excluding
               the conversion charge mentioned above, will be charged at a
               discount for those services listed in Exhibits A and B.

          3.   For the purposes of ordering new service under this Agreement,
               each request for new service shall be handled as a separate and
               initial request for service per billable telephone number. The
               additional line rate for Service Order Charges shall apply only
               to those requests for additional residential service at the end
               user's same location where a residential line is currently
               provided on SWBT's network, regardless of the non-facilities
               based Competitive Local Exchange Carrier of record.

          4.   For purposes of this section, CLEC service orders shall be
               handled in the same fashion as SWBT employs for its own end
               users.

     D.   CUSTOMER SPECIFIC PRICING

          CLEC may convert current SWBT end users and SWBT or any reseller of
          SWBT local service may convert current CLEC end users with existing
          term, volume, termination liability or any customer specific pricing
          (all of the aforementioned referred to hereinafter as CSP) contracts
          existing with the current Local Service Provider (LSP) in the State of
          Texas reciprocally with the following responsibilities subject to any
          modifications ultimately approved in Docket 17759 and any appeals
          thereof:

          1.   RESPONSIBILITIES OF CLEC

               CLEC will assume in writing the balance of the terms, including
               volume, term and termination liability existing on a current
               retail or resold SWBT end user at the time of conversion. CLEC
               may resell the CSP initially at the wholesale discount of 5.62%
               for Customer Specific contracts and 8.04% for existing Tariffed
               Volume and term contracts. Correspondingly, CLEC will not charge
               their end user termination liability when an existing CSP

<PAGE>

                                                                   PAGE 7 OF 40

               contract between CLEC end user is converted to SWBT or any other
               LSP reselling SWBT local service.

          2.   RESPONSIBILITIES OF SWBT

               SWBT will not charge the end user termination liability when an
               existing CSP contract is converted to CLEC for resale.
               Correspondingly, SWBT or other LSP will assume in writing the
               balance of the terms, termination liability, volume or customer
               specific pricing contracts that exist when a current CLEC end
               user is converted to SWBT or other reseller of SWBT local
               service.

III. ADDITIONAL SERVICES

     A.   911/E911

          1.   Access to the 911 or E911 service, available to SWBT end users
               in the area(s) served by CLEC, shall be made available to CLEC's
               end users.

          2.   CLEC shall be responsible for collecting and remitting all
               applicable 911 surcharges on a per line basis to the Public
               Safety Answering Point (PSAP).

          3.   When requested by SWBT, CLEC shall provide timely, accurate and
               complete information on each of CLEC's end users as needed for
               the provisioning of 911 service to CLECs end users. Such
               information shall be in a format and a time frame pre-subscribed
               by SWBT for purposes of 911 administration.

     B.   DIALING PARITY

          1.   LOCAL DIALING PARITY

               SWBT agrees that local dialing parity shall be available to CLEC.
               That is, end users of SWBT and end users of CLEC shall have the
               same exchange boundaries, such end users shall be able to dial
               the same number of digits when making a "local" call.

<PAGE>

                                                                   PAGE 8 OF 40

          2.   IntraLATA TOLL DIALING PARITY

               SWBT agrees to make IntraLATA toll dialing parity available in
               accordance with Section 25(1)(b)(3) of the Telecommunications Act
               of 1996.

     C.   WHITE PAGE DIRECTORIES: LISTINGS, DISTRIBUTION AND INFORMATION PAGE

          1.   CLEC's subscribers to basic residential and business service will
               receive a basic listing in SWBT's White Pages directories in the
               same form and under the same conditions as SWBT provides to its
               subscribers.

               a.   Subscriber listing information on resold lines shall remain
                    the property of SWBT. Upon receipt of a request from a third
                    party directory publisher, including Southwestern Bell
                    Yellow Pages, for subscriber listing information, SWBT will
                    provide to that third party directory publisher CLEC
                    subscriber's listing information on an interfiled basis and
                    indistinguishable from SWBT's subscriber listing
                    information.

               b.   Each CLEC subscriber will receive one copy of SWBT's White
                    Pages directory, and a Yellow Pages directory when cobound
                    with the White Pages, in the same manner and at the same
                    time that they are provided to SWBT's subscribers. It is
                    the Parties' expectation that separately bound Southwestern
                    Bell Yellow Pages directories will be delivered in the same
                    manner and at the same time to CLEC's subscribers as to
                    SWBT's subscribers.

               c.   If an CLEC end user already has a current SWBT directory,
                    SWBT shall not be required to deliver a directory to that
                    end user until new directories are published for that end
                    user's location.

               d.   The listings and directories described above are included in
                    the wholesale price CLEC owes SWBT for resold lines and will
                    be provided by SWBT at no additional charges.

               e.   Additional Listing Services (e.g., foreign listings and
                    signature listing) can be purchased by CLEC for its end
                    users on a per listing basis. CLEC shall pay SWBT for all

<PAGE>

                                                                   PAGE 9 OF 40

                    such listings provided to CLECs end users. The discounts
                    applicable to listing services are contained in Exhibit B.

               f.   CLEC hereby releases SWBT from any and all liability for
                    damages due to errors or omissions in CLEC's subscriber
                    listing information as it appears in the White Pages
                    directory, including, but not limited to, special, indirect,
                    consequential, punitive or incidental damages. To the extent
                    CLEC reimburses its end user subscriber any listing charge
                    due to errors or omissions caused directly by SWBT, SWBT
                    shall reimburse CLEC any associated wholesale rate.

          2.   INFORMATION PAGE

               a.   At CLEC's request, SWBT shall include in the "Informational
                    Page section of SWBT's White Pages directory, for those
                    geographical areas in which CLEC provides local exchange
                    services, CLEC's customer contact information regarding
                    emergency services, billing and service information, repair
                    services and other pertinent information similar to that
                    provided by SWBT in its "Informational Pages." Such
                    information shall be included on the same page with other
                    CLEC information.

               b.   At CLEC's option, CLEC shall be provided a single
                    "Informational Page" (one side of one page) in the
                    informational section of the White Pages directory covering
                    a geographic area where an CLEC provides local exchange
                    service. This page shall be no different in style, size,
                    color and format than SWBT "Informational Pages." Sixty (60)
                    days prior to the directory close date, CLEC shall provide
                    to SWBT the "Informational Page" in the form of camera-
                    ready copy. The charges associated with this service vary
                    from geographic market to market, and are charged outside
                    this Agreement

     D.   DIRECTORY ASSISTANCE (DA)

          SWBT shall provide access to DA to CLEC's end users. CLEC shall pay
          the charges associated with the use of such services by CLEC's end
          users. The discounts applicable TO such services are contained in
          Exhibits A and B, which is attached hereto and made a part hereof.

<PAGE>

                                                                   PAGE 10 OF 42

               days prior to the directory close date, CLEC shall provide to
               SWBT the "Informational Page" in the form of camera-ready copy.
               The charges associated with this service vary from geographic
               market to market, and are charged outside this Agreement.

     D.   DIRECTORY ASSISTANCE (DA)

          SWBT shall provide access to the same DA services it makes available
          to its own end users to CLEC's end users. CLEC shall pay the charges
          associated with the use of such services by CLEC's end users. The
          discounts applicable to such services are contained in Exhibits A and
          B, which is attached hereto and made a part hereof.

     E.   OPERATOR SERVICES (OS)

          1.   SWBT shall provide access to Operator Services to CLEC's end
               users. CLEC shall pay the charges associated with the use of such
               services by CLEC's end users. The discounts applicable to such
               services are contained in Exhibits A and B, which are attached
               hereto and incorporated by reference.

          2.   SWBT shall provide Line Status Verification and Busy Line
               Interrupt on calls made on SWBT's network to CLEC end users. CLEC
               shall pay SWBT associated charges when its end users request such
               services, with discounts to apply as listed in Exhibits A and B.

     F.   PAYPHONE SERVICES

          1.   CLEC may enter the business of providing local telecommunications
               services to payphone service providers (PSPs) for PSPs' use in
               providing payphone service. Local telecommunications services
               which PSPs use in providing and which are provided to PSPs by
               CLEC by means of reselling those of SWBT's services offered
               pursuant to the General Exchange Tariff, See. 36 are referred to
               in this Agreement as "Payphone Lines". In its Common Carrier
               Docket No. 96-128, the Federal Communications Commission ("FCC")
               has ordered SWBT to compensate PSP customers of CLECs that resell
               SWBT's services for certain calls originated from pay telephones
               and received by the resale-based carriers. (IMPLEMENTATION OF THE
               PAY TELEPHONE RECLASSIFICATION AND COMPENSATION PROVISIONS OF THE

<PAGE>

                                                                   PAGE 10 OF 40

     E.   OPERATOR SERVICES (OS)

          1.   SWBT shall provide access to Operator Services to CLEC's end
               users. CLEC shall pay the charges associated with the use of such
               services by CLEC's end users. The discounts applicable to such
               services are contained in Exhibits A and B, which are attached
               hereto and incorporated by reference.

          2.   SWBT shall provide Line Status Verification and Busy Line
               Interrupt on calls made on SWBT's network to CLEC end users. CLEC
               shall pay SWBT associated charges when its end users request such
               services, with discounts to apply as listed in Exhibits A and B.

     F.   PAYPHONE SERVICES

          1.   CLEC may enter the business of providing local telecommunications
               services to payphone service providers (PSPs) for PSPs' use in
               providing payphone service Local telecommunications services
               which PSPs use in providing and which are provided to PSPs by
               CLEC by means of reselling those of SWBT's services offered
               pursuant to the General Exchange Tariff, Sec. 36 are referred to
               in this Agreement as "Payphone Lines". In its Common Carrier
               Docket No. 96-128, the Federal Communications Commission ("FCC")
               has ordered SWBT to compensate PSP customers of CLECs that resell
               SWBT's services for certain calls originated from pay telephones
               and received by the resale-based carriers. (IMPLEMENTATION OF THE
               PAY TELEPHONE RECLASSIFICATION AND COMPENSATION PROVISIONS OF THE
               TELECOMMUNICATIONS ACT OF 1996, FCC Docket No. 96-128, Report and
               Order, para. 86 (1996)). This compensation is referred to in
               this Agreement as "Payphone Compensation".

          2.   The Parties desire that SWBT satisfy its obligation to pay
               Payphone Compensation to Payphone Service Providers (PSPs) who
               are customers of CLEC by paying the Payphone Compensation to the
               CLEC who will then forward the Payphone Compensation directly to
               the PSPs.

IV.  RESPONSIBILITIES OF SWBT

     A.   SWBT shall allow CLEC to place service orders and receive phone number
          assignments (for new lines). These service order activities shall be
          accomplished by facsimile or electronic interface when established.

<PAGE>

                                                                   PAGE 11 OF 40

          SWBT, with input from CLEC, shall provide interface specifications for
          electronic access for these functions to CLEC once such electronic
          interfaces become technically feasible and are in place. However, CLEC
          shall be responsible for modifying and connecting any of its systems
          with SWBT provided interfaces when such interfaces become available,
          as outlined in Appendix OSS.

     B.   SWBT shall implement CLEC service orders within the same time
          intervals SWBT uses to implement service orders for similar services
          for its own end users.

     C.   CLEC will have the ability to report trouble for its end users to
          appropriate SWBT trouble reporting centers 24 hours a day, 7 days a
          week. CLEC will be assigned a customer contact center when initial
          service agreements are made. CLEC end users calling SWBT may be
          referred to CLEC at the number provided by CLEC. SWBT shall at all
          times be responsible for the repair and maintenance of its network.
          Nothing herein shall be interpreted to authorize CLEC to repair,
          maintain, or in any way touch SWBT's network facilities, including
          those on end user premises.

          Operational procedures for ordering and trouble reporting are outlined
          in SWBT's CLEC Handbook as amended by SWBT from time to time. Both
          parties agree to abide by the procedures contained therein.

     D.   On no less than sixty (60) days advance written notice, CLEC may
          request SWBT to make certain usage information available to CLEC on a
          daily basis in a standard electronic format. The information will
          consist of usage sensitive charges SWBT will bill to CLEC arising out
          of the use of resold lines. CLEC agrees to pay SWBT three tenths of a
          cent ($.003) per message for this service, plus other charges outlined
          in Appendix OSS.

     E.   Subject to any future order of the FCC which obligates SWBT to pay an
          amount different from the following, SWBT will pay Payphone
          Compensation due with respect to the Payphone lines in the amount of
          $0.284 per call. SWBT will pay to CLEC such Payphone Compensation only
          for (i) intraLATA subscriber 800 calls for which SWBT provides the 800
          service to the subscriber and carries the call and (ii) intraLATA
          calls placed using SWBT's prepaid calling card platform and carried by
          SWBT. SWBT will not pay to CLEC any Payphone Compensation for non sent
          paid calls.

          1.   SWBT will pay to CLEC the Payphone Compensation due to CLEC
               Customer (PSP) within sixty (60) days after the close of the
               calendar quarter in which the call for which Payphone
<PAGE>

                                                                  PAGE 12 OF 40

               Compensation is due is made. However, payment may be made later
               than sixty (60) days if SWBT deems it necessary to investigate a
               call or calls for possible fraud. To the extent to which SWBT's
               first payment includes Payphone Compensation for calls made prior
               to any calendar quarter which ended thirty (30) days after this
               Agreement takes effect and will include as Payphone Compensation
               under this Agreement an amount equal to the Payphone Compensation
               which would have been due to CLEC under this Agreement this
               Agreement taken effect on October 7,1997.

          2.   SWBT will make any payment due to CLEC under this Agreement by
               crediting CLEC's bill for the Payphone Line over which the call
               which give rise to the Payphone Compensation is placed. SWBT will
               not issue a check to CLEC if the credit for Payphone Compensation
               exceeds the balance due to SWBT on the bill.

          3.   Nothing in this Agreement entitles CLEC to receive or obligates
               SWBT to provide any call detail or other call record.

V.   ADDITIONAL RESPONSIBILITIES OF THE PARTIES

     A.   COOPERATION ON FRAUD

          SWBT shall not be liable to CLEC for any fraudulent usage on CLEC's
          end users' accounts.

          The Parties agree to cooperate with one another to investigate, and
          take corrective action in cases of fraud. The Parties' fraud on
          procedures are to be cost effective and implemented so as not to
          unduly burden or harm one Party as compared to the other.

          At a minimum, such cooperation shall include providing to the other
          Party, upon request, information concerning end users who terminate
          services to that Party without paying all outstanding charges, when
          such end user seeks service from the other Party. The Party seeking
          such information is responsible for securing the. end user's
          permission to obtain such information.

     B.   FILING THE AGREEMENT

          Unless otherwise agreed, if the designated Party fails to file the
          jointly signed agreement with the Commission within forty-five (45)
          days of

<PAGE>

                                                                  PAGE 13 OF 40

          both Parties signatures, then the signed agreement is null and no
          longer valid. If the contract becomes null, either Party can initiate
          negotiations to a new agreement.

VI.  CHANGES IN SUBSCRIBER CARRIER SELECTIONS

     A.   Prior to submitting an order under this Agreement, CLEC shall obtain
          end user authorization as required by applicable state or federal laws
          and regulations, and assumes responsibility for applicable charges as
          specified in Section 258 (b) of the Telecommunications Act of 1996.
          SWBT shall abide by the same applicable laws and regulations.

     B.   Only an end user can initiate a challenge to a change in its local
          exchange service provider. If an end user notifies SWBT or CLEC that
          the end user requests local exchange service, the Party receiving such
          request shall be free to immediately provide service to such end
          user, except in those instances where the end user's account is local
          PIC protected. It is the responsibility of the end user to provide
          express authorization to the current provider of record to remove
          local service provider protection before any changes in local exchange
          service provider are processed.

          SWBT shall be free to connect the end user to any Competitive Local
          Exchange Carrier based upon the Competitive Local Exchange Carrier's
          request and Competitive Local Exchange Carrier's assurance that proper
          end user authorization has been obtained. Both parties shall make
          authorization available to the other party upon request and at no
          charge.

     C.   When an end user changes or withdraws authorization, each Party shall
          release customer-specific facilities in accordance with the end user
          customer's direction or the direction of the end user's authorized
          agent. Further, when an end user abandons the premise, SWBT is free
          to reclaim the facilities for use by another customer and is free to
          issue service orders required to reclaim such facilities.

     D.   Neither Party shall be obligated by this Agreement to investigate any
          allegations of unauthorized changes in local exchange service
          (slamming) on behalf of the other Party or a third party. If SWBT, on
          behalf of CLEC, agrees to investigate an alleged incidence of
          slamming, SWBT shall charge CLEC a fifty dollar ($50) investigation
          fee.

     E.   When SWBT receives an order from CLEC for services under this
          Agreement and SWBT is currently providing the same services to another
          Competitive Local Exchange Carrier for the same end user, SWBT shall
          notify THE END USER'S Competitive Local Exchange Carrier of record of

<PAGE>

                                                                  PAGE 14 OF 40

          such order coincident with processing the order should CLEC subscribe
          to the Local Disconnect Report (LDR) as outlined below. It shall then
          be the responsibility of the Competitive Local Exchange Carrier of
          record and CLEC to resolve any issues related to the end user. This
          paragraph shall not apply to new additional lines and services
          purchased by an end user from multiple CLECs or from SWBT.

     F.   On no less than sixty (60) days notice, CLEC may request the Local
          Disconnect Report. SWBT agrees to furnish to CLEC the Billing
          Telephone Number (BTN), Working Telephone Number (WTN), and terminal
          number of all end users who have disconnected CLEC's service. CLEC
          understands and agrees that the CARE interface will be used to provide
          such information and such information will only be available via the
          CARE electronic data transmission. Information will be provided on a
          per-WTN basis to be priced on a per-WTN basis. SWBT will provide CLEC
          no less than thirty (30) days notice prior to any change of the per-
          WTN charge. SWBT grants to CLEC a non-exclusive right to use the
          information provided by SWBT. CLEC will not permit anyone but its
          duly authorized employees or agents to inspect or use this
          information. CLEC agrees to pay SWBT ten cents ($0.10) per WTN and
          any applicable charges for the LDR as outlined in Appendix OSS.

     G.   The CLEC agrees to hold harmless and indemnify SWBT against any and
          all liability and claims, including reasonable attorney's fees, that
          may result from SWBT acting under this Article.

     H.   Nothing herein shall be interpreted to apply to conversion of CLEC end
          users pursuant to Article XII. (TERMINATION OF SERVICE TO CLEC).

VII. ADDITIONAL RESPONSIBILITIES OF CLEC

     A.   PAYMENT OF RATES AND CHARGES

          1.   CLEC is solely responsible for the payment of charges for all
               services furnished under this Agreement including, but not
               limited to, calls originated or accepted at CLEC's location and
               its end users' service locations, with the exception of any
               retail services provided directly by SWBT to the end user which
               SWBT shall be responsible for billing.

               Interexchange carried traffic (e.g., sent-paid, information
               services and alternate operator services messages) received by
               SWBT for billing to resold end-user accounts will be returned as
               unbillable and will not be passed on to CLEC for billing. An
               unbillable code

<PAGE>

                                                                 PAGE 15 OF 40

             returned with those messages to the carrier will indicate that
             the messages originated from a resold account and will not be
             billed by SWBT.

             In accordance with industry standards, IXC PIC selections for
             lines resold to CLEC will not be processed from IXCs or end
             users, but will only be processed if received from CLEC.

        2.   SWBT shall not be responsible for the manner in which the use of
             resold service, or the associated charges are allocated to others
             by CLEC. All applicable rates and charges for such services will
             be billed to and shall be the responsibility of CLEC, with the
             exception of other retail services provided directly to the end
             user by SWBT as described in paragraph 1 above.

        3.   Compensation for all services shall be paid by CLEC regardless of
             CLEC's ability or inability to collect charges from its end user
             for such service.

        4.   If CLEC does not wish to be responsible for collect, third number
             billed, toll and information services (e.g., 900) calls, it must
             order the appropriate blocking for resold lines under this
             Agreement and pay any applicable charges. CLEC acknowledges that
             blocking is not available for certain types of calls, including
             800 numbers. Where CLEC purchases and maintains the appropriate
             toll restriction or blocking for all of its resold end user
             lines, then DA/OS, Branding and Rate/Reference Information would
             not be required, nor available. It is the responsibility of the
             CLEC to order the appropriate toll restriction or blocking on all
             of their resold end user lines.

        5.   CLEC agrees to pay all costs associated with a CLEC name change.

        6.   DEPOSIT REQUIREMENTS

             a.   If CLEC has not established a minimum of twelve (12)
                  consecutive months good credit history with all telephone
                  company affiliates of SBC Communications, Inc., (i.e., SWBT,
                  Pacific Bell and Nevada Bell) with which CLEC is doing or
                  has done business as a local service provider, CLEC shall
                  remit a cash deposit to SWBT prior to the furnishing of
                  service under this Agreement. The deposit required by the
                  previous sentence shall be determined as


<PAGE>

                                                                 PAGE 16 OF 40

                  follows: (a) if immediately prior to the effective date of
                  this Agreement, CLEC was not operating as a local service
                  provider in the state covered by this Agreement, the deposit
                  shall be in the amount of $17,000; or (b) if immediately
                  prior to the effective date of this Agreement, CLEC was
                  operating as a local service provider in the state covered
                  by this Agreement, the deposit shall be in the amount
                  calculated using the method set forth in Paragraph 6.f.,
                  hereof. This cash deposit will be held by SWBT as a
                  guarantee of payment of charges billed to CLEC. If CLEC has
                  established a minimum of twelve (12) consecutive months good
                  credit history with all telephone company affiliates of SBC
                  Communications, Inc., (i.e., SWBT, Pacific Bell and Nevada
                  Bell) with which CLEC is doing or has done business as a
                  local service provider, SWBT shall waive the initial deposit
                  requirement; provided, however, that the terms and
                  conditions set forth in Paragraphs 6.b through 6.i shall
                  continue to apply for the term of this Agreement and any
                  extension(s) hereof. In determining whether CLEC has
                  established a minimum of twelve (12) consecutive months good
                  credit history with each telephone company affiliate of SBC
                  Communications, Inc. with which CLEC is doing or has done
                  business, CLEC's payment record for the most recent twelve
                  (12) months occurring within the two year period immediately
                  prior to the effective date of this Agreement shall be
                  considered.

             b.   Any cash deposit held by SWBT shall be credited to CLEC's
                  account during the month following the expiration of twelve
                  (12) months after the cash deposit was remitted so long as
                  CLEC has not been sent more than one delinquency
                  notification letter during the most recent twelve (12)
                  months. For the purposes of this paragraph 6., interest will
                  be calculated as defined by the applicable state tariff
                  regulating retail deposits and shall be credited to CLEC's
                  account on an annual basis.

             c.   So long as CLEC maintains timely compliance with its payment
                  obligations, SWBT will not increase the deposit amount
                  required. If CLEC fails to maintain timely compliance with
                  its payment obligations, SWBT reserves the right to require
                  additional deposit(s) in accordance with Paragraphs 6.d.
                  through 6.i. of this Agreement.


<PAGE>

                                                                 PAGE 17 OF 40

             d.   If during the first six (6) months of operations under this
                  Agreement, CLEC has been sent one delinquency notification
                  letter by SWBT, the deposit amount shall be re-evaluated
                  based upon CLEC's actual billing totals and shall be
                  increased if the CLEC's actual billing average for a two
                  month period exceeds the deposit amount held.

             e.   Throughout the term of this Agreement and any extension(s)
                  thereof, any time CLEC has been sent two delinquency
                  notification letters by SWBT, the deposit amount shall be
                  re-evaluated based upon CLEC's actual billing totals and
                  shall be increased if the CLEC's actual billing average for
                  a two month period exceeds the deposit amount held.

             f.   Whenever a deposit is re-evaluated as specified in
                  Paragraphs 6.d. and 6.e., above, such deposit shall be
                  calculated in an amount equal to the average billing to CLEC
                  for a two month period plus the amount of any charges which
                  would be applicable to transfer all then existing resold
                  service to SWBT in the event of CLEC's disconnection for
                  non-payment of charges. The most recent three (3) months
                  billing on all. of CLEC's CBAs shall be used to calculate
                  CLEC's monthly average.

             g.   Whenever a deposit is re-evaluated as specified in
                  Paragraphs 6.d. and 6.e., above, CLEC shall remit the
                  additional deposit amount to SWBT within thirty (30)
                  calendar days of receipt of written notification from SWBT
                  requiring such deposit. If CLEC fails to furnish the required
                  deposit within thirty (30) calendar days of receipt of
                  written notice requesting such deposit, SWBT shall begin
                  the process set forth in Section XII of this Agreement. If
                  CLEC continues to fail to furnish the required deposit at
                  the expiration of the fourteen (14) calendar days specified
                  in Section XII A. of this Agreement, then SWBT shall begin
                  the procedure(s) set forth in Section XII D., et seq. of
                  this Agreement.

             h.   This cash deposit requirement may be satisfied in whole or
                  in part with an irrevocable bank letter of credit acceptable
                  to SWBT. No interest shall be paid by SWBT for any portion
                  of the deposit requirement satisfied by an irrevocable bank
                  letter of credit.

<PAGE>

                                                                 PAGE 18 OF 40

               i.   The fact that SWBT holds a cash deposit or irrevocable bank
                    letter of credit does not relieve CLEC from timely
                    compliance with its payment obligations under this Agreement

          7.   CLEC represents and warrants that the only SWBT services which
               CLEC will make available to PSPs as Payphone Lines are the
               services which SWBT offers pursuant to the Local Exchange
               Services Tariff, Section 36.

               Except as provided otherwise in this paragraph, CLEC shall pay
               the entire amount of the Payphone Compensation due with respect
               to a Payphone Line to the PSP who is the CLEC Customer for the
               payphone line. CLEC shall make such payment on or before the last
               business day of the calendar quarter in which the call for which
               the Payphone Compensation is due to the PSP is made. If SWBT pays
               any Payphone Compensation to the CLEC later than sixty (60) days
               after the close of the calendar quarter in which the call for
               which Payphone Compensation is due is made, then CLEC shall pay
               the entire amount of such Payphone Compensation to the PSP who is
               the CLEC's customer for the Payphone Line within ten (10)
               business days after receiving such Payphone Compensation from
               SWBT.

               CLEC shall indemnify, defend and hold harmless SWBT from and
               against any loss, cost, claim, liability, damage or expense
               (including reasonable attorney's fees) to any third party,
               including PSP, relating to or arising from any of the following:

               a.   CLEC's failure to comply with all the terms and conditions
                    of Sec. VII A.7. or

               b.   Use by a PSP customer of CLEC of any service other than a
                    Payphone Line to provide pay telephone service or

               c.   False representation by CLEC.

     B.   INTERFACES WITH SWBT

          CLEC shall be responsible for modifying and connecting any of its
          systems with SWBT-provided interfaces as described in this Agreement.

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                                                                 PAGE 19 OF 40

     C.   REPAIR CONTACT ARRANGEMENTS

          CLEC shall be responsible for providing to its end users and to SWBT a
          telephone number or numbers that CLEC's end users can use to contact
          CLEC in the event of service or repair requests. In the event that
          CLEC's end users contact SWBT with regard to such requests, SWBT shall
          inform the end user that they should call CLEC and may provide CLEC
          contact number.

     D.   CLEC COMPANY CODE/OPERATING NUMBER (OCN) ALSO KNOWN AS ALTERNATE
          EXCHANGE CARRIER NUMBER (AECN)

          For the purposes of establishing, provisioning and billing service to
          the CLEC, the CLEC is required to provide to SWBT its OCN/AECN for
          resale services in any SWBT state, which must be separate and distinct
          from the CLEC's state-specific OCN/AECNs for facilities-based business
          (interconnection and/or unbundled network elements). CLEC name
          associated with specific resale OCN/AECN must be consistent among SWBT
          states.

     E.   SPECIAL SERVICE ARRANGEMENT

         For special service arrangements for CLEC not covered under this
         Agreement, special charges shall apply as provided in the applicable
         corresponding tariffs.

     F.   DEVELOPMENT OF BRANDING AND CUSTOMIZED ROUTING FOR DIRECTORY
          ASSISTANCE AND OPERATOR SERVICES

          1.   REQUIREMENTS - Pursuant to Section 226 (b) of The
               Telecommunications Act of 1996, each provider of Operator
               Services is required to:

               a.   Provide its brand at the beginning of each telephone call
                    and before the consumer incurs any charge for the call; and

               b.   Disclose immediately to the consumer, upon request a quote
                    of its rates or charges for the call.

               c.   Where SWBT provides CLECs OS and DA services via the same
                    trunk, both the OS and DA calls will be branded with the
                    same brand. Since SWBT's DA and 0S utilize the same trunk
                    group, CLEC will receive the same brand for both DA/OS. Such
                    branding will be provided pursuant Section 2. below.


<PAGE>

                                                                 PAGE 20 OF 40

          2.   CALL BRANDING - Except where CLEC purchases and maintains toll
               restriction or blocking for all of its resold end user lines, in
               compliance with F.1. above, CLEC shall purchase and SWBT shall
               provide DA/OS branding in CLEC's name based upon the criteria
               outlined below. If CLEC does not purchase and maintain toll
               restriction or blocking for all of its resold end user lines,
               CLEC acknowledges and agrees to meet its obligations for
               branding pursuant to Section 226 (b) of the Telecommunications
               Act as described above, and in accordance with the terms,
               conditions and prices as set forth in this agreement.

               a.   CLEC will provide SWBT with written specification of its
                    company name to be used in creating CLEC specific branding
                    messages for its DA/OS calls.

               b.   An initial non-recurring charge applies per load for the
                    establishment of Call Branding as well as a charge per
                    subsequent load to change the brand. In addition, a per call
                    charge applies for every DA/OS call handled by SWBT on
                    behalf of CLEC when such services are provided in
                    conjunction with resale services. Prices for Call Branding
                    are as outlined in Exhibit C, attached hereto and
                    incorporated herein.

          3.   RATE/REFERENCE INFORMATION - Except where CLEC purchases and
               maintains appropriate toll restriction or blocking for all of its
               resold end user lines, CLEC shall purchase and SWBT shall provide
               CLEC DA/OS Rate/Reference Information based upon the criteria
               outlined below. If CLEC does not purchase and maintain toll
               restriction or blocking for all of its resold end user lines,
               CLEC acknowledges and agrees to meet its obligations for
               branding pursuant to Section 226 (b) of the Telecommunications
               Act as described above, and in accordance with the terms,
               conditions and prices as set forth in this agreement.

               a.   CLEC will furnish DA/OS Rate and Reference Information in a
                    mutually agreed to format or media thirty (30) days in
                    advance of the date when the DA/OS Services are to be
                    undertaken.

               b.   CLEC will inform SWBT, in writing, of any changes to be made
                    to such Rate/Reference Information ten (10) working days
                    prior to the effective Rate/Reference change date.

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                                                                 PAGE 21 OF 40

                    CLEC acknowledges that it is responsible to provide SWBT
                    updated Rate/Reference Information in advance of when the
                    Rates/Reference Information are to become effective.

               c.   In all cases when a SWBT Operator receives a rate request
                    from a CLEC end user, SWBT will quote the applicable DA/OS
                    rates as provided by CLEC.

               d.   An initial non-recurring charge will apply for loading of
                    CLEC's DA/OS Rate/Reference Information as well as a charge
                    for each subsequent change to either the CLEC's DA/OS
                    Services Rate or Reference Information as outlined in
                    Exhibit C, attached hereto and incorporated herein.

          4.   CUSTOMIZED ROUTING - Except where CLEC purchases and maintains
               appropriate toll restriction or blocking for all of its resold
               end user lines, SWBT shall also offer CLEC the opportunity to
               customize route DA/OS where technically feasible. CLEC agrees to
               pay SWBT appropriate charges associated with customized routing
               on an ICB basis.

VIII. NONEXCLUSIVITY

      This Agreement is nonexclusive. CLEC acknowledges that SWBT will be
      providing the same or similar services to other local services providers
      in accordance with negotiated agreements which will be filed with the
      appropriate state commission(s). CLEC also acknowledges that SWBT may,
      upon end user request, provide any and all of the services provided to
      CLEC under this Agreement directly to the end users. SWBT acknowledges
      that CLEC may obtain the same or similar services from other local
      exchange companies.

IX.   SUPPORT SYSTEMS SERVICES

      A.   SUPPORT SYSTEMS SERVICES

           1.   TRANSFER OF SERVICE ANNOUNCEMENTS (INTERCEPT)

                The Party formerly providing service to an end user shall
                provide a Basic Referral announcement, reciprocally and free
                of charge on the abandoned telephone number. The announcement
                states that the called number has been disconnected or changed
                and provides the end user's new telephone number to the extent
                that it is listed.

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                                                                 PAGE 22 OF 40

               SWBT shall provide an intercept referral on behalf of CLEC to
               their end user as indicated on the appropriate service order.

               Basic Intercept Referral Announcements are to be provided on
               residential numbers for a minimum of thirty (30) days where
               facilities exist and the threat of telephone number exhaustion is
               not imminent.

               Basic Intercept Referral Announcements for a single line business
               end user and the primary listed telephone number for Direct
               Inward Dial (DID) and "Centrex-type" end users, shall be
               available for a minimum of thirty (30) days or for the life of
               the white pages directory, whichever is greater. If the threat of
               telephone number exhaustion becomes imminent for a particular
               central office, the service provider may reissue a disconnected
               number prior to the expiration of the directory, but no earlier
               than thirty (30) days after the disconnection of the business
               telephone number.

          2.   COORDINATED REPAIR CALLS

               SWBT shall be responsible for repairing its own network. However,
               CLEC shall maintain telephone numbers where its end user may call
               to report instances of trouble.

               The Parties shall employ the following procedures for handling
               misdirected repair calls:

               a.   The Parties shall inform their respective end users of the
                    correct telephone numbers to call to access their respective
                    repair bureaus.

               b.   To the extent the correct provider can be determined, each
                    Party shall refer misdirected repair calls to the proper
                    provider of local exchange service, at no charge, and shall
                    provide the end user the contact telephone number provided
                    by the other party.

                    In responding to repair calls, neither Party shall make
                    disparaging remarks about each other, nor shall they use
                    these repair calls as the basis for internal referrals or to
                    solicit customers or to market services. Either Party may
                    respond with accurate information in answering customer
                    questions.

<PAGE>

                                                                 PAGE 23 OF 40

               c.   The Parties shall provide each other their respective repair
                    contact numbers.

               d.   Notwithstanding anything contained herein to the contrary,
                    SWBT and CLEC agree that SWBT shall have no obligation to
                    unbrand or rebrand the uniforms or training of its
                    customer-contact employees, trucks, vehicles, any customer
                    premises equipment or other customer-owned facilities or
                    SWBT's outside plant or network components.

               e.   Where CLEC requires SWBT personnel to interface directly
                    with CLEC end user customers in any form of communication
                    (including, but not limited to, written, face-to-face, by
                    telephone or electronic transmission of any kind), such SWBT
                    personnel shall be identified as SWBT employees representing
                    the customer's provider.

     B.   NETWORK MANAGEMENT CONTROLS

          Each Party shall provide a 24-hour contact number for Network Traffic
          Management issues to the other. A FAX number must also be provided to
          facilitate event notifications for planned mass calling events.
          Additionally, both Parties agree that they shall work cooperatively
          that all such events shall attempt to be conducted in such a manner as
          to avoid degradation or loss of service to other end users.

     C.   LAW ENFORCEMENT AND CIVIL PROCESS

          SWBT and CLEC shall handle law enforcement requests as follows:

          1.   INTERCEPT DEVICES

               Local and federal law enforcement agencies periodically request
               information or assistance from local telephone service providers.
               When either Party receives a request associated with an end user
               of the other Party, it shall refer such request to the
               appropriate Party, unless the request directs the receiving
               Party to attach a pen register, trap and trace or form of
               intercept on that Party's own facilities, in which case that
               Party shall comply with any valid request.

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                                                                 PAGE 24 OF 40

     2.   SUBPOENAS

          If a Party receives a subpoena for information concerning an end user
          the Party knows to be an end user of the other Party, it shall refer
          the subpoena to the requesting entity with an indication that the
          other Party is the responsible company. Provided, however, if the
          subpoena requests records for a period of time during which the
          receiving Party was -the end user's service provider, the receiving
          Party will respond to any valid request.

     3.   EMERGENCIES

          If a Party receives a request from a law enforcement agency to
          implement a temporary number change, temporary disconnect or one way
          denial of outbound calls for an end user of the other party, the
          receiving Party will comply so long as it is a valid emergency
          request. In the case of the CLEC, the CLEC shall refer such request to
          SWBT and SWBT shall honor such request in accordance with this
          paragraph. Neither Party shall be held liable for any claims or
          damages arising from compliance with such requests, and the Party
          serving the end user agrees to indemnify and hold the other Party
          harmless against any and all such claims.

X.   CALL TRACE

     CLEC end user's activation of Call Trace for a line purchased under this
     Agreement, shall be handled by the SWBT Call Trace Center (CTC). SWBT shall
     notify CLEC of requests by CLEC's end users to provide the call records to
     the proper authorities. Subsequent communication and resolution of the case
     with CLEC's end user (whether that end user is the victim or the suspect)
     shall be the responsibility of CLEC.

     CLEC understands that for services where reports are provided to law
     enforcement agencies (e.g., Call Trace) SWBT shall only provide billing
     number and address information. CLEC shall provide additional information
     necessary for any police investigation.

XI.  TAXES

     CLEC shall be responsible for all federal, state or local, sales, use,
     excise or gross receipts taxes or fees imposed on or with respect to the
     services PROVIDED UNDER THIS AGREEMENT INCLUDING THOSE TAXES AND FEES,
     IMPOSED ON SWBT. CLEC shall reimburse SWBT for the amount of any such taxes
     or fees which SWBT is

<PAGE>

                                                                 PAGE 25 OF 40

     required to pay or collect for services provided to CLEC hereunder. To the
     extent a sale is claimed to be for resale tax exemption, the CLEC shall
     furnish SWBT a proper resale tax exemption certificate as authorized or
     required by statute or regulation by the jurisdiction providing said resale
     tax exemption. Failure to timely provide said resale tax exemption
     certificate will result in no exemption being available to the CLEC until
     such time as CLEC presents a valid certificate.

XII. TERMINATION OF SERVICE TO CLEC

     A.   If CLEC fails to pay when due (within 30 days of the bill date), any
          and all charges billed to them under this Agreement, including any
          late payment charges (Unpaid Charges) or miscellaneous charges, and
          any portion of such charges remain unpaid more than fifteen (15) days
          after the due date of such Unpaid Charges, SWBT shall notify CLEC in
          writing that in order to avoid having service disconnected, CLEC must
          remit all Unpaid Charges to SWBT within fourteen (14) calendar days.

     B.   If CLEC disputes the billed charges, it shall, within the fourteen
          (14) day period provided for above, inform SWBT in writing which
          portion of the charges it disputes, including the specific details and
          reasons for its dispute; immediately pay to SWBT all undisputed
          charges; and pay all disputed charges into an interest bearing escrow
          account established by CLEC with a third party escrow agent mutually
          agreed upon by the Parties.

     C.   Disputes hereunder shall be resolved in accordance with the procedures
          identified in Article XVII (Dispute Resolution). Failure of CLEC to
          pay charges deemed owed to SWBT after conclusion of the Arbitration
          shall be grounds for termination under this Article.

     D.   If any CLEC charges remain unpaid or undisputed twenty-nine (29) days
          past the due date, SWBT shall notify CLEC, the Commission and the end
          user's IXC(s) of Record in writing, that unless all charges are paid
          within sixteen (16) days, CLEC's service shall be disconnected and
          its end users shall be switched to SWBT local service. SWBT will also
          suspend order acceptance with the exception of disconnects on the same
          day that it sends the letter required by the preceding sentence.

     E.   If any CLEC charges remain unpaid or undisputed forty (40) days past
          the due date, CLEC shall, at its sole expense, notify its end users,
          the Commission and the end user's of Record that their service may be
          disconnected for CLEC's failure to pay Unpaid Charges, and that its
          end users must select a new Competitive Local Exchange Carrier within
          five (5) days. The notice shall also advise the end user that SWBT
          will assume

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                                                                 PAGE 26 OF 40

          the end user's account at the end of the five (5) day period should
          the end user fail to select a new Competitive Local Exchange Carrier.

     F.   If any CLEC charges remain unpaid or undisputed forty-five (45) days
          past the due date, SWBT shall disconnect CLEC and transfer all CLEC's
          end users who have not selected another Competitive Local Exchange
          Carrier directly to SWBT's service. These end users shall receive the
          same services provided through CLEC at the time of transfer. SWBT
          shall inform the Commission and the end user's IXC(s) of Record of the
          names of all end users transferred through this process. Applicable
          service establishment charges for switching end users from CLEC to
          SWBT shall be assessed to CLEC.

     G.   Within five (5) days of the transfer (50 days past CLEC's due date),
          SWBT shall notify all affected end users that because of a CLEC's
          failure to pay, their service is now being provided by SWBT. SWBT
          shall also notify the end user that they have thirty (30) days to
          select a Competitive Local Exchange Carrier, after which time should
          the end user not select a CLEC, the end user's service shall be
          terminated.

     H.   SWBT may discontinue service to CLEC upon failure to pay undisputed
          charges as provided in this section, and shall have no liability to
          CLEC or CLEC end users in the event of such disconnection.

     I.   If any end user fails to select a Competitive Local Exchange Carrier
          within thirty (30) days of the change of providers (80 days past
          CLEC's due date), SWBT shall terminate the end user's service. SWBT
          shall notify the Commission and the end user's IXC of Record of the
          names of all end users whose service has been terminated. The end user
          shall be responsible for any and all charges incurred during the
          selection period.

     J.   Nothing herein shall be interpreted to obligate SWBT to continue to
          provide service to any such end users. Nothing herein shall. be
          interpreted to limit any and all disconnection rights SWBT may have
          with regard to such end users.

     K.   After the letter required by Article XII, Section D has been sent to
          CLEC, SWBT shall not accept service orders from CLEC until all unpaid
          and undisputed charges have been paid. SWBT shall have the right to
          require payment of a deposit calculated in accordance with the
          provisions of article VII, Section A, Paragraph 6 of this Agreement
          prior to resuming acceptance of service orders from CLEC.

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                                                                 PAGE 27 OF 40

XIII. FORCE MAJEURE

     Neither party shall be responsible for delays or failures in performance
     resulting from acts or occurrences beyond the reasonable control of such
     Party, regardless of whether such delays or failures in performance were
     foreseen or foreseeable as of the date of this Agreement, including,
     without limitation: fire, explosion, power failure, cable cuts, acts of
     God, war, revolution, civil commotion, or acts of public enemies; any law,
     order, regulation, ordinance or requirement of any government or legal
     body; or labor unrest, including, without limitation, strikes, slowdowns,
     picketing or boycotts; or delays caused by the other party or by other
     service or equipment vendors; or any other circumstances beyond the Party's
     reasonable control. In such event, the Party affected shall, upon giving
     prompt notice to the other Party, be excused from such performance on a
     day-to-day basis to the extent of such interference (and the other Party
     shall likewise be excused from performance of its obligations on a
     day-for-day basis to the extent such Party's obligations relate to the
     performance so interfered with). The affected party shall use its best
     efforts to avoid or remove the cause of nonperformance and both parties
     shall proceed to perform with dispatch once the causes are removed or
     cease.

XIV. LIMITATION OF LIABILITY

     A.   With respect to any claim or suit arising out of SWBT's performance
          under this Agreement, by a CLEC or any others, for damages arising out
          of mistakes, omissions, interruptions, delays or errors, or defects in
          transmission occurring in the course of furnishing service hereunder,
          SWBT's liability, if any, shall not exceed an amount equivalent to the
          proportionate charge to the CLEC for the period of service during
          which such mistake, omission, interruption, delay, error, or defect in
          transmission or service occurs and continues. In no event shall SWBT
          be responsible for any special indirect, consequential or exemplary
          damages. Any mistakes, omissions, interruptions, delays, errors, or
          defects in transmission or service which are caused or contributed to
          by the negligence or willful act of the CLEC or which arise from the
          use of CLEC-provided facilities or equipment shall not result in the
          imposition of any liability whatsoever upon SWBT.

     B.   SWBT shall have no liability to the end users of the CLEC for claims
          arising from the provision of the CLEC's service to its end users
          including, but not limited to, claims for interruption of service,
          quality of service or billing disputes, unless such loss is caused by
          SWBT's own negligence or intentional misconduct in which case
          liability shall be limited as provided in paragraph A, above. In the
          case of any loss alleged

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                                                                 PAGE 28 OF 40

          or made by an end user of CLEC, CLEC shall defend and indemnify SWBT
          against any and all such claims or loss by its end users, unless the
          loss was caused by SWBT's sole negligence or intentional misconduct.

     C.   CLEC hereby releases SWBT and agrees that it shall indemnify SWBT
          with regard to any and all liability for damages due to errors or
          omissions in CLEC's subscriber listing information (including
          erroneous inclusion of nonpublished or nonlisted subscriber listing
          information) as such information is submitted by CLEC, and for
          inclusion in the White Pages directory including, but not limited to,
          special, indirect, consequential, punitive or incidental damages.

     D.   CLEC agrees to indemnify, defend and hold harmless SWBT from any Loss
          arising out of SWBT's provision of 911 services or out of CLEC's end
          users' use of the 911 service, whether suffered, made, instituted, or
          asserted by CLEC or its end users, including for any personal injury
          or death of any person or persons, except for Loss which is the direct
          result of SWBT's own negligence or willful misconduct.

     E.   CLEC shall indemnify and hold SWBT harmless from all claims and
          damages arising from the discontinuance of service for nonpayment to
          SWBT by the CLEC. Notice of discontinuance shall be as specified in
          the Substantive Rules of the State Commission.

     F.   When the lines or services of other companies and carriers are used
          in providing service or establishing connections to and/or from points
          not reached by SWBT's lines, SWBT is not liable for any act or
          omission of the other companies or carriers.

     G.   CLEC shall be responsible for any and damage to SWBT equipment or
          facilities caused by CLEC's own actions.

XV.  NONDISCLOSURE

     The Parties to this Agreement anticipate and recognize that they will
     exchange or come into possession of, data about each other's end users and
     each other's business as a result of this Agreement which will be
     designated as confidential by that Party. Each Party agrees (1) to treat
     all such data as strictly confidential and (2) to use such data only for
     purposes of performance under this Agreement. Each Party agrees not to
     disclose data on the other Party's end users or business which has been
     designated as confidential to any person without first securing the written
     consent of the other Party. The foregoing shall not apply to information
     which is in the public domain.

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                                                                 PAGE 29 OF 40

     If a court or governmental agency orders, or a third party requests, a
     Party to disclose or to provide any data or information covered by this
     Section, that Party will immediately inform the other Party of the order or
     request both by telephone and overnighted mail before disclosing the data
     or information. Notification and consent requirements described above are
     not applicable in cases where a court order requires the production of toll
     billing records of an individual residence or business end user customer.

     This section will not preclude the disclosure by the Parties of information
     or material described in this Section to consultants, agents, or attorneys
     representing the respective Parties or the Office of the Public Counsel for
     the state of Texas, and state Public Utility Commission or staffs, or FCC
     Staff, provided that these third parties are bound by the same or
     comparable confidentiality requirements as the Parties to this Agreement.
     The provisions of this Section will remain in effect notwithstanding the
     termination of this Agreement, unless agreed to in writing by both Parties.

     Pursuant to Section 222 of the Act, both Parties agree to limit their use
     of proprietary information received from the other to the permitted
     purposes identified in the Act.

XVI. PUBLICITY

     The Parties agree not to use in any advertising or sales promotion, press
     releases or other publicity matters any endorsements, direct or indirect
     quotes, or pictures implying endorsement by the other Party or any of its
     employees without such Party's prior written approval. The Parties will
     submit to each other for written approval, prior to publication, all
     publicity matters that mention or display one another's name and/or marks
     or contain language from which a connection to said name and/or marks may
     be inferred or implied.

XVII. ASSIGNMENT

      Neither Party may assign, subcontract, or otherwise transfer its rights or
      obligations under this Agreement except under such terms and conditions as
      are mutually acceptable to the other Party (e.g., a conversion charge will
      apply per billable telephone number) and with such Party's prior written
      consent, which consent shall not be unreasonably withheld. Assignment
      without consent shall be grounds for immediate termination of this
      Agreement.

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                                                                 PAGE 30 OF 40

XVIII. DISPUTE RESOLUTION

     A.   FINALITY OF DISPUTES

          1.   Except as otherwise specifically provided for in this Agreement,
               no claims will be brought for disputes arising from this
               Agreement more than 24 months from the date the occurrence which
               gives rise to the dispute is discovered or reasonably should have
               been discovered with the exercise of due care and attention.

     B.   ALTERNATIVE TO LITIGATION

          1.   The Parties desire to resolve disputes arising out of this
               Agreement without litigation. Accordingly, the Parties agree to
               use the following Dispute Resolution procedure with respect to
               any controversy or claim arising out of or relating to this
               Agreement or its breach.

     C.   COMMENCING DISPUTE RESOLUTION

          1.   Dispute Resolution shall commence upon the sending from one Party
               to the other of written notice of a controversy or claim arising
               out of or relating to this Agreement or its breach. No Party may
               pursue any claim unless such written notice has first been given
               to the other Party.

     D.   INFORMAL RESOLUTION OF DISPUTES

          1.   When such written notice has been given, as required by Section
               C, Commencing Dispute Resolution, each Party will appoint a
               knowledgeable, responsible representative to meet and negotiate
               in good faith to resolve any dispute arising under this Agreement
               The location, form, frequency, duration, and conclusion of these
               discussions will be left to the discretion of the
               representatives. Upon agreement, the representatives may utilize
               other alternative dispute resolution procedures such as mediation
               to assist in the negotiations. Discussions and the correspondence
               among the representatives for purposes of settlement are exempt
               from discovery and production and will not be admissible in the
               arbitration described below or in any lawsuit without the
               concurrence of both parties. Documents identified in or provided
               with such communications, which are not prepared for purposes of
               the negotiations, are not so exempted and, if otherwise
               admissible, may be admitted in evidence in the arbitration or
               lawsuit.

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                                                                 PAGE 31 OF 40

     E.   FORMAL DISPUTE RESOLUTION

          1.   If the Parties are unable to resolve the dispute through the
               informal procedure described above in Section D, Informal
               Resolution of Disputes, then either Party may invoke the
               following formal Dispute Resolution procedures. Unless agreed
               upon by the Parties, formal dispute resolution procedures
               described below, including arbitration or other procedures as
               appropriate, may be invoked not earlier than sixty (60) days
               after the date of the letter initiating dispute resolution under
               Section C, Commencing Dispute Resolution.

          2.   CLAIMS SUBJECT TO MANDATORY ARBITRATION. The following claims, if
               not settled through informal dispute resolution, will be subject
               to mandatory arbitration pursuant to Section F, Arbitration
               below:

               a.   All unresolved billing disputes involving one (1) percent or
                    less of the amounts charged to CLEC by SWBT under this
                    Agreement during the Contract Year in which the dispute
                    arises. During the first Contract Year the Parties will
                    annualize the initial months up to one year.

               b.   All other claims involving one (1) percent or less of the
                    amounts charged to CLEC by SWBT under this Agreement during
                    the Contract Year in which the matter in dispute arises,
                    whether measured by the disputing Party in terms of actual
                    amounts owed or owing, or as amounts representing its
                    business or other risks or obligations relating to the
                    matter in dispute. During the first Contract Year the
                    Parties will annualize the initial months up to one year.

          3.   CLAIMS SUBJECT TO ELECTIVE ARBITRATION. The following claims will
               be subject to arbitration pursuant to Section F, Arbitration if
               and only if, the claim is not settled through informal dispute
               resolution and both parties agree to arbitration. If both parties
               do not agree to arbitration, then either party may proceed with
               any remedy available to it pursuant to law, equity or agency
               mechanism.

               a.   All unresolved billing disputes involving more than one (1)
                    percent of the amounts charged to CLEC by SWBT under this
                    Agreement during the Contract Year in which the matter in
                    dispute arises, whether measured by the disputing Party in
                    terms of actual amounts owed or owning, or as

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                                                                 PAGE 32 OF 40

                    amounts representing its business or other risks or
                    obligation relating to the matter in dispute. During the
                    first Contract Year the Parties will annualize the initial
                    months up to one year.

               b.   All other claims involving more than one (1) percent of the
                    amounts charged to CLEC by SWBT under this Agreement during
                    the Contract Year in which the matter in dispute arises,
                    whether measured by the disputing Party in terms of actual
                    amounts owed or owing, or as amounts representing its
                    business or other risks or obligations relating to the
                    matter in dispute. During the first Contract Year the
                    Parties will annualize the initial months up to one year.

          4.   CLAIMS NOT SUBJECT TO ARBITRATION If the following claims are not
               resolved through informal dispute resolution, they will not be
               subject to arbitration and must be resolved through any remedy
               available to a Party pursuant to law, equity or agency mechanism.

               a.   Actions seeking a temporary restraining order or an
                    injunction related to the purposes of this Agreement.

               b.   Actions to compel compliance with the Dispute Resolution
                    process.

               c.   All claims arising under federal or state statute(s),
                    including, but not limited to, antitrust claims.

     F.   ARBITRATION

          1.   Disputes subject to mandatory or elective arbitration under the
               provisions of this Agreement will be submitted to a single
               arbitrator pursuant to the Commercial Arbitration Rules of the
               American Arbitration Association or pursuant to such other
               provider of arbitration services or rules as the Parties may
               agree. Each arbitration will be held in Dallas, Texas, unless the
               parties agree otherwise. The arbitration hearing will be
               requested to commence within sixty (60) days of the demand for
               arbitration. The arbitrator will control the scheduling so as to
               process the matter expeditiously. The Parties may submit written
               briefs upon a schedule determined by the arbitrator. The Parties
               will request that the arbitrator rule on the dispute by issuing a
               written opinion within thirty (30) days after the close of
               hearings. The Federal Arbitration Act, 9 U.S.C. Secs. 1-16, not
               state law, shall govern the

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                                                                 PAGE 33 OF 40

               arbitrability of all disputes. The arbitrator will have no
               authority to award punitive damages, exemplary damages,
               consequential damages, multiple damages, or any other damages not
               measured by the prevailing party's actual damages, and may not in
               any event make any ruling, finding or award that does not conform
               to the terms and conditions of the Agreement. The arbitrator
               shall be knowledgeable of telecommunications issues. The times
               specified in this Section may be extended or shortened upon
               mutual agreement of the Parties or by the arbitrator upon a
               showing of good cause. Each Party will bear its own costs of
               these procedures, including attorneys' fees. The Parties will
               equally split the fees of the arbitration and the arbitrator. The
               arbitrator's award shall be final and binding and may be entered
               in any court having jurisdiction thereof. Judgment upon the award
               rendered by the arbitrator may be entered in any court having
               jurisdiction.

     G.   BILLING DISPUTES

          1.   The following provisions apply specifically to billing disputes.

               a.   The Parties agree that all bills, including bills disputed
                    in whole or in part, are to be paid when due, that interest
                    applies to all overdue invoices as set forth in the
                    applicable provisions of this Agreement, and that no other
                    late payment fee or charge applies to overdue invoices. The
                    Parties further agree that if any billing dispute is
                    resolved in favor of the disputing Party the disputing Party
                    will receive, by crediting or otherwise, interest applied to
                    the disputed amount as set forth in the applicable
                    provisions of this Agreement.

               b.   To the extent that any other portions of this Agreement
                    provide for a bill closure process between the parties, or
                    if such a process is mutually agreed to by the Parties, the
                    procedures involved in such processes will not be deemed to
                    place a particular billing item in dispute for purposes of
                    Section XVIII, Dispute Resolution.

               c.   Each Party agrees to notify the other Party of a billing
                    dispute and may invoke the- informal dispute resolution
                    process described in Section D, Informal Resolution of
                    Disputes. The parties will endeavor to resolve the dispute
                    within sixty (60) calendar days of the Bill Date on which
                    such disputed charges appear, or, if the charges have been

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                                                                 PAGE 34 OF 40

                    subject to the bill closure process described in Section E,
                    Formal Dispute Resolution, above, within sixty (60) calendar
                    days of the closure of the billing period covered by such
                    bill closure process.

     H.   NO CONFLICT

          1.   The Dispute Resolution procedures set forth in this Agreement are
               not intended to conflict with applicable requirements of the Act
               or the state commission with regard to procedures for the
               resolution of disputes arising out of this Agreement.

XIX. VERIFICATION REVIEWS

     Each Party to this Agreement will be responsible for the accuracy and
     quality of its data as submitted to the respective Parties involved. Upon
     reasonable written notice, each Party or its authorized representative
     (providing such authorized representative does not have a conflict of
     interest related to other matters before one of the Parties) shall have the
     right to conduct a review and verification of the other Party to give
     assurances of compliance with the provisions of this Agreement. This
     includes on-site verification reviews at the other Party's or the Party's
     vendor locations.

     After the initial year of this Agreement verification reviews will
     normally be conducted on an annual basis with provision for staged reviews,
     as mutually agreed, so that all subject matters are not required to be
     reviewed at the same time. Follow up reviews will be permitted between
     annual reviews where significant deviations are found. During the initial
     year of the Agreement more frequent reviews may occur.

     The review will consist of an examination and verification of data
     involving records, systems, procedures and other information related to the
     services performed by either Party as related to settlement charges or
     payments made in connection with this Agreement as determined by either
     Party to be reasonably required. Each Party, whether or not in connection
     with an on-site verification review, shall maintain reasonable records for
     a period of time no less than twenty-four (24) months from the date such
     records are created and provide the other Party with reasonable access to
     such information as is necessary to determine amounts receivable or payable
     under this Agreement.

     Each Party's right to access information for verification review purposes
     is limited to data not in excess of 24 months in age. Once specific data
     has been reviewed and verified, it is unavailable for future reviews. Any
     items not reconciled at the end of a review will, however, be subject to a
     follow-up review effort. Any

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                                                                 PAGE 35 OF 40

     retroactive adjustments required subsequent to previously reviewed and
     verified data will also be subject to follow-up review. Information of
     either Party involved with a verification review shall be subject to the
     nondisclosure terms of this Agreement.

     The Party requesting a verification review shall fully bear its costs
     associated with conducting the review. The Party being reviewed will
     provide access to required information, as outlined in this Section, at no
     charge to the reviewing Party. Should the reviewing Party request
     information or assistance beyond that reasonably required to conduct such a
     review, the Party being reviewed may, as its option, decline to comply with
     such request or may bill actual costs incurred in complying subsequent to
     the concurrence of reviewing Party.

XX.  COMPLIANCE WITH LAWS

     The Parties believe in good faith that the Services to be provided under
     this Agreement satisfy the requirements of the Act In the event a court or
     regulatory agency of competent jurisdiction should determine that
     modifications of this Agreement are required to bring the Services being
     provided hereunder into compliance with the Act, the affected Party shall
     promptly give the other Party written notice of the modifications deemed
     required. Upon delivery of such notice, the Parties shall expend diligent
     efforts to arrive at an agreement respecting such modifications required,
     and if the Parties are unable to arrive at such agreement, either Party may
     terminate this Agreement, without penalty, effective the day the affected
     Party is ordered to implement the modifications deemed required, or
     effective on the day either Party concludes and gives notice that the
     Parties will not be able to arrive at any agreement respecting such
     modifications, whichever date shall occur earlier.

     This Agreement is an integrated package that reflects a balancing of
     interests critical to the Parties. It will be submitted to the applicable
     state regulatory Commission and the FCC as a compliance filing, and the
     Parties will specifically request that the applicable state regulatory
     Commission and the FCC refrain from taking any action to change, suspend or
     otherwise delay implementation of the Agreement. In the event the
     Commission or the FCC rejects any portion or provision of this Agreement or
     subsequently issues a ruling or order that results in a provision being
     contrary to law, or is invalid for any reason, the parties shall continue
     to be bound by the terms of this Agreement, insofar as possible, except for
     the portion rejected or subsequently determined to be unlawful, invalid, or
     unenforceable. In such event, the Parties shall negotiate in good faith to
     replace the rejected, unlawful, invalid, or unenforceable provision and
     shall not discontinue service to the other Party during such period if to
     do so would disrupt existing service being provided to an end user. So long
     as the Agreement remains in effect, the Parties shall not advocate before
     any legislative, regulatory, or other

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                                                                 PAGE 36 OF 40

       public forum that any terms of this specific Agreement be modified or
       eliminated. Notwithstanding this mutual commitment, however, the Parties
       enter into this Agreement without prejudice to any positions they have
       taken previously, or may take in the future in any legislative,
       regulatory, or other public forum addressing any matters, including
       matters related to the types of arrangements prescribed by this
       Agreement.

XXI.   CERTIFICATION REQUIREMENTS

       CLEC warrants that it has obtained all certifications required in those
       jurisdictions in which CLEC has ordered services pursuant to this
       Agreement. Subject to restrictions in Article II.A. (Permitted Use of
       Resold Service by CLEC and Its End Users), CLEC covenants that any
       originating service provider utilizing the resold services under this
       Agreement has obtained all required certification.

       Upon request by any governmental entity, the CLEC is required to provide
       proof of certification.

XXII.  INTENTIONALLY LEFT BLANK

XXIII. NOTIFICATION

       SWBT will notify CLEC of any changes in the prices, terms and conditions
       under which SWBT offers telecommunications services at retail to
       subscribers who are not telecommunications service providers or carriers,
       including, but not limited to, the introduction of any new features,
       functions, services, promotions, grandfathering or the discontinuance of
       current features or services at the time a tariff filing is transmitted
       to the State Commission, or, in situations where a tariff filing is not
       so transmitted, within ninety (90) days (forty-five (45) days for price
       changes) of the expected effective date of such change.

       With regard to new services, the notification shall advise CLEC of the
       category in which such new service shall be placed and the discount
       applicable to the new service.

       SWBT currently uses the Accessible Letter process to notify CLEC of such
       changes to the services available for resale. Any change to the process
       of notification to the CLEC will provide no less notice than the current
       Accessible Letter process.

XXIV.  NOTICES

       In the event any notices are required to be sent under the terms of this
       Agreement, they may be sent by registered mail and are deemed to have
       been

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                                                                 PAGE 37 OF 40

     given on the date received. Notice may also be effected by personal
     delivery or by overnight courier, and will be effective upon receipt.
     Notice may also be provided by facsimile, which will be effective on the
     next business day following the date of transmission; provided, however,
     notices to a Party's 24-hour maintenance contact number will be by
     telephone and/or facsimile and will be deemed to have been received on the
     date transmitted. The Parties will provide the appropriate telephone and
     facsimile numbers to each other.

     Unless otherwise specifically provided in this Agreement, notice will be
     directed as follows:

     To CLEC:                                    To SWBT:

     essential.com                               Contract Administration
     John Duffy, Vice President                  ATTN: Contract Management
     Of Business Development,                    Four Bell Plaza, 9th Floor
     Telecom Services                            311 S. Akard St.
     3 Burlington Woods Dr., 4th Floor           Dallas, TX 75202-5398
     Burlington, MA  O1803

     Either Party may unilaterally change its designated representative,
     address, telephone contact number and/or facsimile number for the receipt
     of notices by giving written notice to the other Party in compliance with
     this Section. Any notice to change the designated representative, address,
     telephone contact and/or facsimile number for the receipt of notices shall
     be deemed effective ten (10) days following receipt by the other Party.

XXV. BENEFICIARIES

     This Agreement shall not provide any nonparty with any remedy, claim, cause
     of action or other right.

XXVI. TERM

     SWBT and CLEC agree that the initial term of this Agreement shall commence
     upon approval of this Agreement by the Public Utility Commission of Texas
     and shall expire on October 12, 2000. Following expiration of the initial
     term, the Agreement shall renew for additional terms of one (1) year unless
     and until terminated as provided herein. Either Party may terminate this
     Agreement by providing written notice of termination to the other Party, at
     least 60 days in advance of the date of proposed termination. Upon the
     termination date, if CLEC has not made arrangements to provide service to
     its end users over its own or alternative facilities, SWBT shall invoke the
     notification and transfer of

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                                                                 PAGE 38 OF 40

        end user procedures outlined in Article XII. D. and F. (Termination of
        service to CLEC).

XXVII.  EFFECTIVE DATE

        The effective date of this Agreement shall be ten (10) days after the
        date that the appropriate state regulatory Commission approves this
        Agreement.

XXVIII. WAIVER

        The failure of either Party to enforce or insist that the other party
        comply with any of the terms or conditions of this Agreement, or the
        waiver by either Party in a particular instance of any of the terms and
        conditions of this Agreement, shall not be construed as a general
        waiver or relinquishment of the terms and conditions, but the Agreement
        shall be and remain at all times in full force and effect.

XXIX.   DISCLAIMER OF WARRANTIES

        SWBT MAKES NO REPRESENTATION OR WARRANTIES, EXPRESS OR IMPLIED,
        INCLUDING BUT NOT LIMITED TO ANY WARRANTY AS TO MERCHANTABILITY OR
        FITNESS FOR INTENDED OR PARTICULAR PURPOSE WITH RESPECT TO SERVICES
        PROVIDED HEREUNDER. ADDITIONALLY, SWBT ASSUMES NO RESPONSIBILITY WITH
        REGARD TO THE CORRECTNESS OF DATA OR INFORMATION SUPPLIED BY CLEC WHEN
        THIS DATA OR INFORMATION IS ACCESSED AND USED BY A THIRD PARTY.

XXX.    RELATIONSHIP OF THE PARTIES

        This Agreement shall not establish, be interpreted as establishing, or
        be used by either Party to establish or to represent their relationship
        as any form of agency, partnership or joint venture. Neither Party
        shall have any authority to bind the other or to act as an agent for
        the other unless written authority, separate from this Agreement, is
        provided. Nothing in the Agreement shall be construed as providing for
        the sharing of profits or losses arising out of the efforts of either
        or both of the Parties. Nothing herein shall be construed as making
        either Party responsible or liable for the obligations and undertakings
        of the other Party.

XXXI.   INTERVENING LAW AND PRESERVATION OF RIGHTS

        This Agreement is entered into as a result of both private negotiation
        between the Parties and the incorporation of some of the results of
        arbitration by the Public Utility Commission of Texas. If the actions
        of the State of Texas or federal legislative bodies, courts, or
        regulatory agencies of competent jurisdiction

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                                                                  PAGE 39 OF 40


         invalidate, modify, or stay the enforcement of laws or regulations
         that were the basis or rationale for a provision of the contract,
         the affected provision shall be invalidated, modified, or stayed,
         consistent with the action of the legislative body, court, or
         regulatory agency upon the written request of either party. In such
         event, the Parties shall expend diligent efforts to arrive at an
         agreement respecting the appropriate modifications to the Agreement.
         If negotiations fail, disputes between the Parties concerning the
         interpretation of the actions required or provisions affected by
         such governmental actions shall be resolved pursuant to the dispute
         resolution process provided for in this Agreement. Without limiting
         the general applicability of the foregoing, the Parties acknowledge
         that on January 25, 1999, the United States Supreme Court issued its
         opinion in AT&T CORP. V. IOWA UTILITIES BD, 119 S. Ct. 721 (1999)
         and on June 1, 1999, the United States Supreme Court issued its
         opinion in AMERITECH V. FCC, NO. 98-1381, 1999 WL 116994, 1999 LEXIS
         3671 (1999). The Parties further acknowledge and agree that by
         executing this Agreement, neither Party waives any of its rights,
         remedies, or arguments with respect to such decisions and any remand
         thereof, including its rights under this paragraph.

XXXII.   COMPLETE TERMS

         This Agreement, together with its exhibits constitutes the entire
         agreement between the Parties and supersedes all prior discussions,
         representations or oral understandings reached between the Parties.

         The corresponding tariffs and this Agreement (including the exhibits)
         contain all of the applicable rates and charges to be paid by the
         CLEC to SWBT in connection with SWBT's provision of
         telecommunications service to CLEC for Resale to its end user
         customers.

         Neither Party shall be bound by any amendment, modification or
         additional terms unless it is reduced to writing signed by an
         authorized representative of the Party sought to be bound.

         By their signatures in the space provided below, CLEC and SWBT
         indicate their acceptance of this Agreement. This agreement shall
         not bind CLEC and SWBT until executed by both Parties. This
         Agreement will be governed by and interpreted in accordance with the
         laws of the State of Texas.

<PAGE>

                                                                  PAGE 40 OF 40


THIS AGREEMENT CONTAINS A BINDING ARBITRATION AGREEMENT.

essential.com                               SOUTHWESTERN BELL TELEPHONE
AECN/OCN:                                   COMPANY
         ---------

 /s/ Akhil Garland President
--------------------------------            -----------------------------------
Signature,                                  Signature

 Akhil Garland
--------------------------------            -----------------------------------
Printed Name                                Printed Name

President                                   President - Industry Markets
--------------------------------            -----------------------------------
Position/Title                              Position/Title

27 Sept.  1999
--------------------------------            -----------------------------------
Date                                        Date

<PAGE>
                                                                    PAGE 1 OF 6


<TABLE>
<CAPTION>
                                                   EXHIBIT A
                       SOUTHWESTERN BELL'S RESALE TELECOMMUNICATIONS SERVICES* LIST - BUSINESS
                                                    TEXAS

                                                                                     RESALE DISCOUNTS
                                                                            RECURRING               NON-RECURRING
LOCAL EXCHANGE SERVICE
<S>                                                                        <C>                       <C>
Business 1 Party                                                              21.6%                    21.6%
Business - Multi-Line Hunting                                                 21.6%                    21.6%
Business - Measured                                                           21.6%                    21.6%
Business - Measured (HTG Class of Service)                                    21.6%                    21.6%
Customer Operated Pay Telephone (COPT)                                        21.6%                    21.6%

EXPANDED LOCAL CALLING
EMS - Optional                                                                21.6%                    21.6%
Expanded Local Calling (Mandatory)                                            21.6%                    21.6%
Extended Area Calling Service - Optional                                      21.6%                    21.6%
Mandatory EACS - Hotel/Motel Measured Trunk                                   21.6%                    21.6%
Mandatory EACS - Multi-Line Hunting                                           21.6%                    21.6%
Mandatory EACS - One element measured, 1-party                                21.6%                    21.6%
Mandatory EACS - PBX Trunk                                                    21.6%                    21.6%
Mandatory Extended Area Calling Service (EACS)- 1                             21.6%                    21.6%
Party

VERTICAL SERVICES
Anonymous Call Rejection                                                      21.6%                    21.6%
Auto Redial                                                                   21.6%                    21.6%
Auto Redial - Usage Sensitive                                                 21.6%                    21.6%
Call Blocker                                                                  21.6%                    21.6%
Call Forwarding                                                               21.6%                    21.6%
Call Forwarding - Busy Line                                                   21.6%                    21.6%
Call Forwarding - Busy Line/Don't Answer                                      21.6%                    21.6%
Call Forwarding - Don't Answer                                                21.6%                    21.6%
Call Return                                                                   21.6%                    21.6%
Call Return - Usage Sensitive                                                 21.6%                    21.6%
Call Trace                                                                    21.6%                    21.6%
Call Waiting                                                                  21.6%                    21.6%
Calling Name                                                                  21.6%                    21.6%
Calling Number                                                                21.6%                    21.6%
</TABLE>

*Some Services are not available in all Areas.
Resale products available subject to state and federal rules, regulations and
tariffs.

<PAGE>

                                                                    PAGE 2 OF 6

<TABLE>
<CAPTION>
                                                                                           RESALE DISCOUNTS
                                                                                 RECURRING                NON-RECURRING
VERTICAL SERVICES (CONT.)
<S>                                                                             <C>                       <C>
ComCall -Registered Trademark-                                                     21.6%                     21.6%
Personalized Ring (1 dependent number)                                             21.6%                     21.6%
Personalized Ring (2 dependent numbers - 1st                                       21.6%                     21.6%
number)
Personalized Ring (2 dependent numbers - 2nd                                       21.6%                     21.6%
number)
Priority Call                                                                      21.6%                     21.6%
Remote Access to Call Forwarding                                                   21.6%                     21.6%
Selective Call Forwarding                                                          21.6%                     21.6%
Simultaneous Call Forwarding                                                       21.6%                     21.6%
Speed Calling 8                                                                    21.6%                     21.6%
Speed Calling 30                                                                   21.6%                     21.6%
Three Way Calling                                                                  21.6%                     21.6%

DID
DID (First Block of 100 - Category 1)                                              21.6%                     21.6%
DID (First Block of 10 - Category 1)                                               21.6%                     21.6%
DID (Ea. adl. block of 10 after first 10 - Category 1)                             21.6%                     21.6%
DID (Ea. adl. block of 100 after first 100 - Category 2)                           21.6%                     21.6%
DID (Ea. adl. block of 10 assigned over 1st 100 -                                  21.6%                     21.6%
 Category 2)
DID (with dial pulse)                                                              21.6%                     21.6%
DID (with Multifrequency)                                                          21.6%                     21.6%
DID (with Dual-Tone Multifrequency)                                                21.6%                     21.6%
DID (1 st 10 Trunks or access lines)                                               21.6%                     21.6%
DID (11 th thru 50th trunk or network access line)                                 21.6%                     21.6%
DID (51st trunk or network access line)                                            21.6%                     21.6%

TRUNKS
Trunk                                                                              21.6%                     21.6%

AIN
Area Wide Networking                                                               21.6%                     21.6%
Caller Intellidata -Registered Trademark-                                          21.6%                     21.6%
Disaster Routing Service                                                           21.6%                     21.6%
Intelligent Redirect -SM-                                                          21.6%                     21.6%
IntelliNumber                                                                      21.6%                     21.6%
Positive ID                                                                        21.6%                     21.6%
</TABLE>

*Some Services are not available in all Areas.
Resale products available subject to state and federal rules, regulations and
tariffs.

<PAGE>

                                                                    PAGE 3 OF 6

<TABLE>
<CAPTION>
                                                                                       RESALE DISCOUNTS
                                                                             RECURRING               NON-RECURRING
OTHER
<S>                                                                           <C>                        <C>
Customer Alerting Enablement                                                    21.6%                     21.6%
Grandfathered Services                                                          21.6%                     21.6%
Hot Line                                                                        21.6%                     21.6%
Hunting                                                                         21.6%                     21.6%
Local Operator Assistance Service                                               21.6%                     21.6%
Night Number associated with Telephone Number                                   21.6%                     21.6%
Night Number associated with a Terminal                                         21.6%                     21.6%
Bundled Telecommunications Services (e.g., the                                  21.6%                     21.6%
Works)
Promotions (Greater than 90 days)                                               21.6%                     21.6%
Telebranch -Registered Trademark-                                               21.6%                     21.6%
TouchTone (Business)                                                            21.6%                     21.6%
TouchTone (Trunk)                                                               21.6%                     21.6%
Voice Dial                                                                      21.6%                     21.6%
Warm Line                                                                       21.6%                     21.6%

ISDN
Digiline -SM-                                                                   21.6%                     21.6%
Select Video Plus -Registered Trademark-                                        21.6%                     21.6%
Smart Trunk -SM-                                                                21.6%                     21.6%

DIRECTORY ASSISTANCE SERVICES                                                   21.6%                     21.6%

TOLL
IntraLATA MTS                                                                   21.6%                     21.6%
MaxiMizer 800 -Registered Trademark-                                            21.6%                     21.6%
OutWATS                                                                         21.6%                     21.6%

OPTIONAL TOLL CALLING PLANS
1+SAVER -SM-                                                                    21.6%                     21.6%

PLEXAR -Registered Trademark-
Plexar I -Registered Trademark-                                                 21.6%                     21.6%
Plexar II -Registered Trademark-                                                21.6%                     21.6%
Plexar Custom                                                                   21.6%                     21.6%
</TABLE>
*Some Services are not available in all Areas.
Resale products available subject to state and federal rules, regulations and
tariffs.

<PAGE>

                                                                    PAGE 4 OF 6

<TABLE>
<CAPTION>
                                                                                    RESALE DISCOUNTS
                                                                           RECURRING               NON-RECURRING
<S>                                                                          <C>                       <C>
PRIVATE LINE
Analog Private Lines                                                         21.6%                     21.6%
Business Video Service                                                       21.6%                     21.6%
DOVLink                                                                      21.6%                     21.6%
Frame Relay                                                                  21.6%                     21.6%
MegaLink I -Registered Trademark-                                            21.6%                     21.6%
MegaLink II -Registered Trademark-                                           21.6%                     21.6%
MegaLink III -Registered Trademark-                                          21.6%                     21.6%
MicroLink I -Registered Trademark-                                           21.6%                     21.6%
Network Reconfiguration Service                                              21.6%                     21.6%
</TABLE>




*Some Services are not available in all Areas.
Resale products available subject to state and federal rules, regulations and
tariffs.



<PAGE>

                                                                    PAGE 5 OF 6

    SOUTHWESTERN BELL'S RESALE TELECOMMUNICATIONS SERVICES* LIST - RESIDENCE
                                     TEXAS

<TABLE>
<CAPTION>
                                                                                                  RESALE DISCOUNTS
                                                                                          RECURRING            NON-RECURRING
<S>                                                                                        <C>                    <C>
LOCAL EXCHANGE SERVICE
Life Line and Link Up America Services                                                     21.6%                  21.6%
Residence 1 Party                                                                          21.6%                  21.6%
Residence Measured                                                                         21.6%                  21.6%

EXPANDED LOCAL CALLING
Expanded Local Calling (Mandatory)                                                         21.6%                  21.6%
Mandatory Extended Area Calling Service (EACS)- 1 Party                                    21.6%                  21.6%
Mandatory EACS - One element measured, 1 Party                                             21.6%                  21.6%
EMS - Optional                                                                             21.6%                  21.6%
Extended Area Calling Service - Optional                                                   21.6%                  21.6%

VERTICAL SERVICES
Anonymous Call Rejection                                                                   21.6%                  21.6%
Auto Redial                                                                                21.6%                  21.6%
Auto Redial - Usage Sensitive                                                              21.6%                  21.6%
Call Blocker                                                                               21.6%                  21.6%
Call Forwarding                                                                            21.6%                  21.6%
Call Forwarding - Busy Line                                                                21.6%                  21.6%
Call Forwarding - Busy Line/Don't Answer                                                   21.6%                  21.6%
Call Forwarding - Don't Answer                                                             21.6%                  21.6%
Call Return                                                                                21.6%                  21.6%
Call Return - Usage Sensitive                                                              21.6%                  21.6%
Call Trace                                                                                 21.6%                  21.6%
Call Waiting                                                                               21.6%                  21.6%
Calling Name                                                                               21.6%                  21.6%
Calling Number                                                                             21.6%                  21.6%
ComCall -Registered Trademark-                                                             21.6%                  21.6%
Personalized Ring (1 dependent number)                                                     21.6%                  21.6%
Personalized Ring (2 dependent numbers - 1st number)                                       21.6%                  21.6%
Personalized Ring (2 dependent numbers - 2nd number)                                       21.6%                  21.6%
Priority Call                                                                              21.6%                  21.6%
Remote Access to Call Forwarding                                                           21.6%                  21.6%
Selective Call Forwarding                                                                  21.6%                  21.6%
Simultaneous Call Forwarding                                                               21.6%                  21.6%
</TABLE>


*Some Services are not available in all Areas.
Resale products available subject to state and federal rules, regulations and
tariffs.



<PAGE>

                                                                    PAGE 6 OF 6

<TABLE>
<CAPTION>
                                                                                   RESALE DISCOUNTS
                                                                           RECURRING              NON-RECURRING
<S>                                                                          <C>                      <C>
VERTICAL SERVICES (cont.)
Speed Calling 8                                                              21.6%                    21.6%
Three Way Calling                                                            21.6%                    21.6%

DIRECTORY ASSISTANCE SERVICES                                                21.6%                    21.6%

ISDN
Digiline-SM-                                                                 21.6%                    21.6%

OTHER
Customer Alerting Enablement                                                 21.6%                    21.6%
Grandfathered Services                                                       21.6%                    21.6%
Hot Line                                                                     21.6%                    21.6%
Local Operator Assistance Service                                            21.6%                    21.6%
Bundled Telecommunications Services (e.g., the                               21.6%                    21.6%
Works)
Promotions (Greater than 90 days)                                            21.6%                    21.6%
Preferred Number Service                                                     21.6%                    21.6%
TouchTone                                                                    21.6%                    21.6%
Voice Dial                                                                   21.6%                    21.6%
Warm Line                                                                    21.6%                    21.6%

TOLL
Home 800-SM-                                                                 21.6%                    21.6%
IntraLATA MTS                                                                21.6%                    21.6%
</TABLE>


*Some Services are not available in all Areas.
Resale products available subject to state and federal rules, regulations and
tariffs.


<PAGE>

                                                                  PAGE 1 OF 1

                                   EXHIBIT B

                  SOUTHWESTERN BELL'S RESALE OTHER SERVICES* LIST
                                     TEXAS

<TABLE>
<CAPTION>
                                                                                       RESALE DISCOUNTS
                                                                             RECURRING               NON-RECURRING
                                                                             ---------               -------------
<S>                                                                          <C>                     <C>
900/976 Call Restriction                                                        21.6%                     21.6%
976 Information Delivery Service                                                 0%                        0%
Access Services                                                                  0%                        0%
Additional Directory Listings                                                   21.6%                     21.6%
Bill Plus                                                                        5%                        5%
Cellular Mobile Telephone Interconnection Services                               0%                        0%
Company Initiated Suspension Service                                             0%                        0%
Connections with Terminal Equipment and                                          0%                        0%
Communications Equipment
Consolidated Billing                                                             5%                        5%
Construction Charges                                                             0%                        0%
Customer Initiated Suspension Service                                            0%                        0%
Distance Learning                                                               21.6%                     21.6%
Exchange Connection Service                                                      0%                        0%
Maintenance of Service Charges                                                   0%                        0%
Shared Tenant Service                                                            0%                        0%
Telecommunications Service Priority Systems                                      0%                        0%
Toll Restriction                                                                21.6%                     21.6%
</TABLE>



*Some Services not available in all Areas.
Resale products available subject to state and federal rules, regulations and
tariffs.



<PAGE>

                                                                  PAGE 1 OF 1

                                   EXHIBIT C
                                APPENDIX RESALE
                                    TEXAS
                   OS/DA PRICING - BRANDING, RATE & REFERENCE

The following rates will apply for each service element:

--------------------------------------------------------------------------
A. CALL BRANDING

An initial non-recurring charge applies per TOPS switch, per
brand for the establishment of CLEC specific Call Branding.
A Per Call charge also applies. When there are subsequent
changes to the branding announcement, an additional non-
recurring charge will also apply per TOPS, per brand, for
each change.

                               Rate per initial load group   $1,081.00
                            Rate per load for Brand change   $1,081.00
                                                  Per Call    $0.0312
--------------------------------------------------------------------------
B. DIRECTORY ASSISTANCE RATE/REFERENCE
   INFORMATION

An initial non-recurring charge applies per TOPS switch, per
rate schedule for the initial load of CLEC's DA Services
Rate/Reference Information. An additional non-recurring
charge applies per TOPS switch, per rate schedule for each
subsequent change to Rate/Reference Information.

                                    *Rate per initial load   $1,958.67
                           Rate per subsequent rate change     $934.44
                      Rate per subsequent reference change     $934.44
--------------------------------------------------------------------------
C. OPERATOR SERVICES RATE/REFERENCE
   INFORMATION

An initial non-recurring charge applies per TOPS switch, per
rate schedule for the initial load of CLEC's Operator
Services Rate/Reference Information. An additional non-
recurring charge applies per TOPS switch, per rate schedule
for each subsequent change to Rate/Reference Information.

                                    *Rate per initial load   $1,958.67
                           Rate per subsequent rate change     $934.44
                      Rate per subsequent reference change     $934.44
--------------------------------------------------------------------------


* Initial Load Charges for Rate/Reference (B and C) when ordered together,
will incur a single Initial Load Charge. In cases where Rate/Reference
information is ordered separately, individual Initial Load charges will apply
to each order.

<PAGE>

                                                                 PAGE 1 OF 11

                         APPENDIX OSS-RESALE

<PAGE>
                                                                  PAGE 2 OF 11

                                 APPENDIX OSS

                ACCESS TO OPERATIONS SUPPORT SYSTEMS FUNCTIONS

1.   GENERAL CONDITIONS

     1.1 This Appendix sets forth the terms and conditions under which SWBT
provides nondiscriminatory access to SWBT's operations support systems (OSS)
"functions" to CLEC for pre-ordering, ordering, provisioning, maintenance /
repair, and billing.

     1.2 Resale functions will be accessible via electronic interface, as
described herein, where such functions are available. Manual access is available
for all pre-ordering, ordering, provisioning, and billing functions via the
Local Service Center (LSC). Repair and maintenance functions are available in a
manual mode through the Local Operations Center (LOC).

     1.3 CLEC agrees to utilize SWBT electronic interfaces, as described herein,
only for the purposes of establishing and maintaining Resale services through
SWBT. In addition, CLEC agrees that such use will comply with the summary of
SWBT's Operating Practice No. 113, Protection of Electronic Information, titled
Competitive Local Exchange Carrier Security Policies and Guidelines. Failure to
comply with such security guidelines may result in forfeiture of electronic
access to OSS functionality.'

     1.4 CLEC's access to pre-order functions described in 2.2.2 will only be
utilized to view Customer Proprietary Network Information (CPNI) of another
carrier's end-user where CLEC has obtained an authorization for release of CPNI
from the end-user and has obtained an authorization to become the end user's
local service provider. The authorization for release of CPNI must substantially
reflect the following:

     1.4.1 "This written consent serves as instruction to all holders of my
local exchange telecommunications Customer Proprietary Network Information
(CPNI) and account identification information to provide such information to the
undersigned. Specifically, I authorize disclosure of my account billing name,
billing address, and directory listing information, and CPNI including, service
address, service and feature subscription, long distance carrier identity, and
pending service order activity. This Authorization remains in effect until such
time that I revoke it directly or appoint another individual/company with such
capacity or undersigned receives notice to disconnect my local exchange service
or notice that a service disconnect has been performed. At and from such time,
this Authorization is null and void."

Or
     1.4.2 Authorization for change in local exchange service and release of
CPNI with documentation that adheres to all requirements of state and federal
law, as applicable.

<PAGE>

                                                                  PAGE 3 OF 11

     1.5 By utilizing electronic interfaces to access OSS functions, CLEC agrees
to perform accurate and correct ordering as it relates to the application of
Resale rates and charges where they are subject to the terms of this Agreement
and applicable SWBT tariffs. All exception handling must requested manually from
the LSC.

     1.6 In areas where Resale order functions are not available via an
electronic interface for the pre-order, ordering and provisioning processes,
SWBT and CLEC will use manual processes. Should SWBT develop electronic
interfaces for these functions for itself, SWBT will make electronic access
available to CLEC.

     1.7 The Information Services (I.S.) Call Center provides a technical
support function for electronic interfaces. CLEC will also provide a single
point of contact for technical issues related to the electronic interfaces.

     1.8 SWBT and CLEC will establish interface contingency plans and disaster
recovery plans for the pre-order, ordering and provisioning of Resale services.

     1.9 SWBT reserves the right to modify or discontinue the use of any system
or interface as it deems appropriate. Provided however,

         (a) SWBT shall provide CLEC with at least 90 days prior written notice
of any planned discontinuance and provide CLEC with a functionally equivalent
interface to access the OSS functions for any system or interface that is
discontinued. Upon CLEC request, SWBT shall also provide a reasonable transition
period.

         (b) SWBT shall provide CLEC with reasonable prior written notice of any
significant system modifications.

     1.10 If CLEC elects to utilize electronic interfaces based upon industry
guidelines for Resale, SWBT and CLEC agree to participate in the Order and
Billing Forum (OBF) and the Telecommunications Industry Forum (TCIF) to
establish and conform to uniform industry guidelines for electronic interfaces
for pre-order, ordering, and - provisioning. Neither Party waives its rights as
participants in such forums or in the implementation of the guidelines. TO
achieve system functionality as quickly as possible, the Parties acknowledge
that SWBT may deploy these interfaces with requirements developed in advance of
industry guidelines. Thus, subsequent modifications may be necessary to comply
with emerging guidelines. CLEC and SWBT are individually responsible for
evaluating the risk of developing their respective systems in advance of
guidelines and agree to support their own system modifications to comply with
new requirements. In addition, SWBT has the right to define LSR Usage
requirements according to the General Section 1.0, paragraph 1.4 of the
practices in the OBF Local Service Ordering Guidelines (LSOG), which states:
"Options described in this practice may not be applicable to individual
providers tariffs; therefore, use of either the field or valid entries within
the field is based on the providers tariffs/practices."

<PAGE>

                                                                  PAGE 4 OF 11

     1.11 Due to enhancements and on-going development of access to SWBT's OSS
functions, certain interfaces described in this Appendix may be modified,
temporarily unavailable or may be phased out after execution of this Appendix.
In compliance with section 1.9 of this Appendix, SWBT agrees that interfaces
phased out will be accompanied with proper notice.

     1.12 CLEC is responsible for obtaining operating system software and
hardware to access OSS functions as specified in the document "Requirements for
Access to Southwestern Bell OSS Functions."

2.   PRE-ORDER

     2.1 SWBT will provide real time access to pre-order functions to support
CLEC ordering of Resale services. The Parties acknowledge that ordering
requirements necessitate the use of current, real time pre-order information to
accurately build service orders. The following lists represent pre-order
functions that are available to CLEC so that CLEC order requests may be created
to comply with SWBT ordering requirements.

     2.2 PRE-ORDERING FUNCTIONS FOR RESALE SERVICES INCLUDE:

         2.2.1 Features and services available at a valid service address (as
applicable);

         2.2.2 Access to SWBT retail or resold customer proprietary network
INFORMATION (CPNI) for preordering will include: billing name, service address,
billing address, service and feature subscription, directory listing
information, long distance carrier identity, and pending service order activity
(CLEC agrees that CLEC's representatives will not access the information
specified in this subsection until after the customer requests that his or her
local exchange service provider be changed to CLEC, and a customer authorization
for release of CPNI complies with conditions as described in section 1.4 of this
Appendix.)

         2.2.3 A telephone number (if the customer does not have one assigned)
with the customer on-line;

         2.2.4 Service availability dates to the customer;

         2.2.5 Information regarding whether dispatch is required;

         2.2.6 Primary Interexchange Carrier (PIC) options for intraLATA toll
(when available) and interLATA toll;

         2.2.7 Service address verification.

     2.3. ELECTRONIC ACCESS TO PRE-ORDER FUNCTIONS: SWBT will provide CLEC
access to one or more of the following systems:

<PAGE>

                                                                  PAGE 5 OF 11

         2.3.1 RESALE SERVICES PRE-ORDER SYSTEM AVAILABILITY:

            2.3.1.1 Residential Easy Access Sales Environment (R-EASE): R-EASE
is an ordering entry system through which SWBT provides CLEC access to the
functions of preordering when R-EASE is utilized to order SWBT Residential
Resale Services.

            2.3.1.2 Business Easy Access Sales Environment (B-EASE): B-EASE is
an ordering entry system through which SWBT provides CLEC access to the
functions of preordering when such access is utilized to order SWBT-Business
Resale Services.

            2.3.1.3 DataGate is a transaction-based data query system through
which SWBT provides CLEC access to pre-ordering functions. This gateway shall be
a Transmission Control Protocol/Internet Protocol (TCP/IP) gateway and will
allow CLEC to access the preorder functions for Resale services by CLEC
developing its own end-user interface. SWBT and CLEC agree to cooperate in
developing and implementing an electronic communication interface that will be
consistent with industry guidelines developed by the OBF and the TCIF, assuming
they are different from that which SWBT is providing.

            2.3.1.4 Verigate is an end-user interface developed by SWBT that
provides access to the pre-ordering functions for Resale Services. Verigate may
be used in connection with electronic or manual ordering. Verigate is accessible
via Toolbar.

         2.3.2 OTHER PRE-ORDER FUNCTION AVAILABILITY:

            2.3.2.1 Where pre-ordering functions are not available
electronically CLEC will manually request this information from SWBT's LSC for
inclusion on the service order request.

            2.3.2.2 In addition to electronic interface access to pre-order
information, upon request but not more frequently than once a month, SWBT will
provide CLEC certain pre-order information in batch transmission for the
purposes of back-up data for periods of system unavailability. Specifically, the
following database information may be electronically provided, Street Address
Guide (SAG) Guide, Service and Feature Availability by NXX and a PIC list, to
support address verification, service and feature availability and PIC
availability, respectively. The parties recognize such information must be used
to construct order requests only in exception handling situations.

3.   ORDERING/PROVISIONING

     3.1 SWBT provides real time access to ordering functions (as measured from
the time SWBT receives accurate service requests from the interface) to support
CLEC provisioning of Resale services via one or more electronic interfaces. To
order Resale services, CLEC will format the service request to identify what
features, services, or elements it wishes SWBT to

<PAGE>

                                                                  PAGE 6 OF 11

provision in accordance with SWBT ordering requirements. SWBT will provide CLEC
access to one or more of the following systems or interfaces:

     3.2 RESALE SERVICES ORDER REQUEST SYSTEM AVAILABILITY:

         3.2.1 R-EASE is available for the generation of Residential Resale
services orders. Ordering flows are available via this system.

         3.2.2 B-EASE is available for the generation of Business Resale
services orders. Ordering flows are available via this system.

         3.2.3 Service Order Retrieval and Distribution (SORD) interface
provides CLECs with the ability to create certain complex Resale orders that
cannot be ordered through EASE, EDI or LEX In addition, the SORD interface
supports the modification of Service Orders submitted electronically by CLEC.
Should CLEC elect to correct service order errors via SORD, CLEC will be
responsible for correcting all errors occurring prior to completion, on any
orders submitted electronically by CLEC.

         3.2.4 SWBT makes available to CLEC an Electronic Data Interchange (EDI)
interface for transmission of SWBT ordering requirements via formats provided on
the Local Service Request (LSR) as defined by the Ordering and Billing Forum
(OBF) and via EDI mapping as defined by TCIF. In ordering and provisioning
Resale, CLEC and SWBT will utilize industry guidelines developed by OBF and TCIF
EDI to transmit data based upon SWBT's Resale ordering requirements.

         3.2.5 LEX is an end-user interface that provides access to the ordering
functions for Resale Services.

     3.3 PROVISIONING FOR RESALE SERVICES: SWBT will provision Resale Services
as detailed in CLEC order requests. Access to status on such orders will be
provided via the following electronic interfaces:

         3.3.1 Order Status will allow CLEC to check service order status.
Order Status is accessible via SWBT Toolbar. In addition, pending orders can be
viewed in SORD.

         3.3.2 In cases of EDI ordering, SWBT will provide CLEC with an EDI
interface for transferring and receiving orders, Firm Order Confirmation (FOC),
service completion, and, as available, other provisioning data and information.
SWBT will provide CLEC with a FOC for each Resale service request. The FOC will
include: purchase order number, telephone number, Local Service Request number,
due date, Service Order number, and completion date. Upon work completion, SWBT
will provide CLEC with an 855 EDI transaction-based Order Completion that states
when that order was completed. CLEC may submit supplement requests via the 860
EDI transaction, and, where available, SWBT will provide CLEC an 865 EDI
transaction-based Completion notice.

<PAGE>

                                                                  PAGE 7 OF 11

            3.3.2.1 The Parties agree that the following timelines are
applicable to electronically generated service orders with errors corrected
via SORD: 1) Errors occurring between application and distribution must be
corrected within 5 hours for a simple order and within 24 hours for a complex
order, 2)Error Service Order Image (ESOI) errors must be corrected within 3
business hours. Service orders will be excluded from calculation of the results
for all related performance measurements, described in Appendix Performance
Measurements, if CLEC fails to correct service order errors within the
timeframes specified above. Additionally, service orders, with errors that occur
after order generation, but prior to distribution will not qualify for a SBC
issued FOC.

         3.3.3 In cases of EDI ordering, SWBT will provide CLEC with an EDI
interface for transferring and receiving orders, Firm Order Confirmation (FOC),
service completion, and, as available, other provisioning data and information.
SWBT will provide CLEC with a FOC for each Resale service request. The FOC will
include: purchase order number, telephone number, Local Service Request number,
due date, Service Order number, and completion date. Upon work completion, SWBT
will provide CLEC with an 855 EDI transaction-based Order Completion that states
when that order was completed. CLEC may submit supplement requests via the 860
EDI transaction, and, where available, SWBT will provide CLEC an 865 EDI
transaction-based Completion notice.

         3.3.4 A file transmission may be provided to confirm order completions
for REASE or B-EASE order processing. This file will provide service order
information of all distributed and completed orders for CLEC.

            3.3.4.1 The Parties agree that the following timelines are
applicable to electronically generated service orders with errors corrected via
SORD: 1) Errors occurring between application and distribution must be corrected
prior to releasing the order from EASE; 2) Error Service Order Image (ESOI)
errors must be corrected within 3 business hours Service orders will be excluded
from calculation of the results for the related performance measurements,
described in Appendix Performance Measurements, if CLEC fails to correct service
order errors within the timeframes specified above. Additionally, service orders
with errors that occur after order generation, but prior to distribution will
not qualify for a SBC issued FOC.

4.   MAINTENANCE/REPAIR

     4.1 Two real time electronic interfaces are accessible to place, and check
the status of trouble reports for both Resales. Upon request, CLEC may access
these functions via the following methods:

         4.1.1 Trouble Administration (TA) system access provides CLEC with SWBT
software that allows CLEC to submit trouble reports and subsequently check
status on trouble reports for CLEC end-users. TA will provide the ability to
review the maintenance history of a converted Resale CLEC account. TA is
accessible via SWBT Toolbar.

<PAGE>
                                                                   PAGE 8 OF 11

         4.1.2 Electronic Bonding Interface (EBI) is an interface that is
available for trouble report submission and status updates. This EBI conforms to
ANSI guidelines T1:227:1995 and T1.228:1995, Electronic Communications
Implementation Committee (ECIC) Trouble Report Format Definition (TFRD) Number I
as defined in ECIC document ECIC/TRA/95-003, and all guidelines referenced
within those documents, as mutually agreed upon by CLEC and SWBT. Functions
currently implemented will include Enter Trouble, Request Trouble Report Status,
Add Trouble Information, Modify Trouble Report Attributes, Trouble Report
Attribute Value Change Notification, and Cancel Trouble Report, as explained in
6 and 9 of ANSI T1.228:1995. CLEC and SWBT will exchange requests over a
mutually agreeable X.25-based network.

5.   BILLING

     5.1 SWBT shall bill CLEC for resold services. SWBT shall send associated
billing information to CLEC as necessary to allow CLEC to perform billing
functions. At minimum SWBT will provide CLEC billing information in a paper
format or via magnetic tape, as agreed to between CLEC and SWBT.

     5.2 ELECTRONIC ACCESS TO BILLING INFORMATION FOR RESALE SERVICES WILL ALSO
BE AVAILABLE VIA THE FOLLOWING INTERFACES:

         5.2.1 CLEC may receive Bill Plus -TM-, an electronic version of their
bill as described in and in accordance with SWBT's Local Exchange Tariff.

         5.2.2 CLEC may receive a mechanized bill format via the EDI 811
transaction set.

         5.2.3 CLEC may also view billing information through the Bill
Information interface. Bill Information will be accessible via SWBT Toolbar.

         5.2.4 SWBT shall provide CLECs a Usage Extract Feed electronically, on
a daily basis, with information on the usage billed to its accounts for resale
services in the industry standardized Exchange Message Record (EMR) format,

         5.2.5 CLEC may receive Local Disconnect Report records (via CARE
records) electronically that indicate when CLEC's customers change their
Competitive Local Exchange Carrier.

6.   REMOTE ACCESS FACILITY

     6.1 CLEC must access the following SWBT OSS interfaces via a CLEC Remote
Access Facility (LRAF) located in Dallas, Texas: R-EASE; B-EASE; DataGate;
EDI-Ordering; SORD Supplement and via Toolbar, Trouble Administration, Order
Status, Verigate, LEX, and

<PAGE>

                                                                   PAGE 9 OF 11

Bill Information. Connection to the LRAF will be established via a "port" either
through dial-up or direct connection as described in Section 6.2. CLEC may
utilize a port to access these interfaces to perform the supported functions in
any SWBT state where CLEC has executed an Appendix OSS and purchases System
Access in that state.

     6.2 CLEC may use three types of access: Switched, Private Line, and Frame
Relay. For Private Line and Frame Relay "Direct Connections," CLEC shall provide
its own router, circuit, and two Channel Service Units/Data Service Units
(CSU/DSU). The demarcation point shall be the router interface at the LRAF.
Switched Acces "Dial-up Connections" require CLEC to provide its own modems and
connection to the SWBT LRAF. CLEC shall pay the cost of the call if Switched
Access is used.

     6.3 CLEC shall use TCP/IP to access SWBT OSS via the LRAF. In addition,
each CLEC shall have one valid Internet Protocol (IP) network address. CLEC
shall maintain a user-id /password unique to each individual for accessing a
SWBT OSS on CLEC's behalf. CLEC shall provide estimates regarding its volume of
transactions, number of concurrent users, desired number of private line or
dial-up (switched) connections, and length of a typical session.

     6.4 CLEC shall attend and participate in implementation meetings to discuss
CLEC LRAF access plans in detail and schedule testing of such connections.

7.   OPERATIONAL READINESS TEST (ORT) FOR ORDERING/PROVISIONING AND REPAIR/
     MAINTENANCE INTERFACES

     7.1 Prior to live access to interface functionality, the Parties must
conduct Operational Readiness Testing (ORT), which will allow for the testing of
the systems, interfaces, and processes for the OSS functions ORT will be
completed in conformance with agreed upon processes and implementation dates.

     7.2 Prior to live system usage, CLEC must complete user education classes
for SWBT-provided interfaces that affect the SWBT network. Classes are
train-the-trainer format to enable CLEC to devise its own course work for its
own employees. Charges will apply for each class. Classes will be required for
R-EASE, B-EASE, LEX, SORD Supplement and Trouble Administration. Optional
classes will be available for Order Status and Verigate. Classes are
train-the-trainer format to enable CLEC to devise its own coursework for its own
employees. Charges apply to training delivery. Schedules will be made available
upon request and are subject to change, with class lengths varying. Ongoing
class schedules may be requested from the CLEC's account manager.

<PAGE>
                                                                 PAGE 10 OF 11

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
Training Rates        5 day      4.5 day    4 day      3.5 day    3 day     2.5 day      2 day    1.5 day     1 day     1/2 day
                      class       class     class       class     class      class       class     class      class     class
-------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>        <C>        <C>        <C>        <C>       <C>         <C>        <C>       <C>         <C>
1 to 5 students       $4,050     $3,650     $3,240     $2,835     $2,430     $2,025     $1,620     $1,215      $810      $405
6 students            $4,860     $4,380     $3,890     $3,402     $2,915     $2,430     $1,945     $1,455      $970      $490
7 students            $5,670     $5,100     $4,535     $3,969     $3,400     $2,835     $2,270     $1,705     $1,135     $570
8 students            $6,480     $5,830     $5,185     $4,536     $3,890     $3,240     $2,590     $1,950     $1,300     $650
9 students            $7,290     $6,570     $5,830     $5,103     $4,375     $3,645     $2,915     $2,190     $1,460     $730
10 students           $8,100     $7,300     $6,480     $5,670     $4,860     $4,050     $3,240     $2,430     $1,620     $810
11 students           $8,910     $8,030     $7,130     $6,237     $5,345     $4,455     $3,565     $2,670     $1,780     $890
12 students           $9,720     $8,760     $7,780     $6,804     $5,830     S4,860     $3,890     $2,920     $1,945     $970

--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     7.3 A separate agreement will be required as a commitment to pay for a
specific number of CLEC students in each class. CLEC agrees that charges will be
billed by SWBT and CLEC payment is due 30 days later. CLEC agrees that personnel
from other competitive Local Service Providers may be scheduled into any class
to fill any seats for which the CLEC has not contracted. Class availability is
first-come, first served with priority given to CLECs who have not yet attended
the specific class.

     7.4 Class dates will based upon SWBT availability and will be coordinated
between CLEC, Account Manager and Product Management.

     7.5 CLEC agrees to pay cancellation fee of the full price noted in the
separate agreement if CLEC cancels scheduled classes less than two weeks prior
to the scheduled start date. CLEC agrees to provide to SWBT completed
registration forms for each student no later than one week prior to the
scheduled training class.

     7.6 CLEC agrees that CLEC personnel attending classes are to utilize only
training databases and training presented to them in class. Attempts to access
any other SWBT or SBC system are strictly prohibited.

     7.7 CLEC further agrees that training material, manuals and instructor
guides can be duplicated only for internal use for the purpose of training
employees to utilize capabilities SWBT's OSS in accordance with this Appendix.

8.   RATES

     8.1 CLEC requesting access to one or more of the SWBT OSS functions (i.e.,
pre-ordering, ordering / provisioning, maintenance / repair, billing) agrees to
pay the following rate:

     System Access                         $ 3,200.00/ month

     8.2 CLEC requesting functions via interfaces that require connection to the
Remote Access Facility, as described in section 6, agrees to pay the following
rate(s) depending upon on method of access utilized:

<PAGE>

                                                                 PAGE 11 OF 11

<TABLE>
<CAPTION>

             Remote Access Facility Access Methods
            <S>                                       <C>
             Direct Connection Per Port                $ 1,505.00/ month
             Dial Up Per Port                          $   301.00/ month
</TABLE>

     8.3 CLEC requesting the Bill Plus-TM- , as described in 5.2.1, agrees to
pay applicable tariffed rate, less Resale discount.

     8.4 CLEC requesting the billing function for Usage Billable Records, as
described in 5.2.4, agrees to pay $.003 per message transmitted.

     8.5 CLEC requesting the Local Disconnect Report, as described in 5.2.5,
agrees to pay $0.10 per record transmitted.

     8.6 Should unforeseen modifications and costs to provision OSS functions
become required by SWBT or industry guidelines, or by regulatory rulings, SWBT
reserves the right to modify its rate structure. In addition, should CLEC
request custom development of an exclusive interface to support OSS functions,
such development will be considered by SWBT on an Individual Case Basis (ICB)
and priced as such.

9.   EFFECTIVE DATE, TERM

     9.1 Whereas CLEC is currently operational under an existing, approved
Interconnection Agreement, this Appendix OSS will be effective, pending
commission approval, 10 days after it is filed with the state commission.
Alternatively, this Appendix will be effective upon approval by the state
commission when it is approved as a part of the Interconnection Agreement.

10.  APPLICABILITY OF OTHER RATES, TERMS AND CONDITIONS

     This appendix, and every service provided hereunder, shall be subject to
all rates, terms and conditions contained in this Agreement or other appendices
or attachments to this Agreement which are legitimately related to such service;
and all such rates, terms and conditions are incorporated by reference herein
and as part of every service provided hereunder. Without limiting the general
applicability of the foregoing, the following terms and conditions of the
General Terms and Conditions of the Resale Agreement are specifically agreed by
the Parties to be legitimately related to, and to be applicable to, each service
provided hereunder description of rates and charges for services, terms and
conditions for resale of services, responsibilities of SWBT, additional
responsibilities of the parties, additional responsibilities of CLEC,
termination of service to CLEC, changes in subscriber carrier selection,
notices, effective date, terra, disclaimer of warranties, limitation of
liability, force majeure, nondisclosure, dispute resolution, verification
reviews, compliance with laws, intervening law and preservation of rights.

<PAGE>

                                                                   PAGE 1 OF 21

                             APPENDIX
                      PERFORMANCE MEASUREMENTS

<PAGE>

                                                                   PAGE 2 OF 21

                     APPENDIX PERFORMANCE MEASUREMENTS

1.0     INTRODUCTION

        This Appendix Performance Measurements contains Performance Criteria
        which applies to resold services. The measurements set forth in this
        Appendix illustrates non-discriminatory access to SWBT's Operations
        Support Systems (OSS) and covers each of the five recognized OSS
        functions (pre-ordering, ordering, provisioning, maintenance and repair,
        and billing).

        The performance measurements contained herein, notwithstanding any
        provisions in any other appendix in this Agreement, are not intended to
        create, modify or otherwise affect parties' rights and obligations. The
        existence of any particular performance measure, or the language
        describing that measure, is not evidence that CLEC is entitled to any
        particular manner of access, nor is it evidence that SWBT is limited to
        providing any particular manner of access. The parties' rights and
        obligations to such access are defined elsewhere, including the relevant
        laws, FCC and PUC. decisions/regulations, tariffs, and within this
        agreement.

2.0     DEFINITIONS

        When used in this Appendix, the following terms will have the meanings
        indicated:

        2.1     Performance Criteria means the target level of SWBT performance
                specified for each Performance Measurement. Generally, the
                Performance Measurements contained in this Appendix specify
                performance equal to that which SWBT achieves for itself in
                providing. equivalent end user, service as the Performance
                Criterion.

        2.2     For certain Performance Measurements, a specific quantitative
                target has been adopted as the Performance Criterion. The
                determination of compliance is through the comparison of the
                measured performance delivered to CLEC and the applicable
                benchmark.

        2.3     Performance Measures means the set of measures listed in all
                of section 6.0 of this Appendix.

3.0     SPECIFIED PERFORMANCE STANDARDS

        3.1     SWBT will meet the Performance Criteria contained in this
                Appendix, except in those instances where its failure to do so
                is a result of a) the CLEC's failure to perform any of its
                obligations set forth in this Agreement or under the Act, or
                Texas law b) any delay, act or failure to act by an end user,
                agent or subcontractor of the CLEC, c) any Force Majeure Event,
                d) or non-SWBT


<PAGE>

                                                                   PAGE 3 OF 21

                problems associated with third party systems or equipment, which
                could not have been avoided by SWBT in exercise of reasonable
                diligence. Provided, however, the third party exclusion will not
                be raised by SWBT more than three times within a calendar year.

4.0     RECORDS AND REPORTS

        4.1     SWBT will not levy a separate charge for provision of the data
                to CLEC called for under this Appendix. Notwithstanding other
                provisions of this Agreement, the Parties agree that such data
                and associated records will be deemed Proprietary Information.

        4.2     Reports are to be made available to the CLEC by the 20th day
                following the close of the calendar month. If the 20th falls on
                a weekend or holiday, the reports will be made available the
                next business day.

        4.3     CLEC will have access to monthly reports through an interactive
                Website.

        4.4     CLEC and SWBT will consult with one another and attempt in good
                faith to resolve any issues regarding the accuracy or integrity
                of data collected, generated, and reported pursuant to this
                Appendix.

        4.5     UNE measurement categories included on the reports will be zero
                filled as that data is not applicable to resold services.

5.0     INITIAL IMPLEMENTATION; DATA REVIEW

        5.1     Every six months, SWBT, CLEC, and Commission representatives
                will review the performance measures to determine whether
                measurements should be added, deleted, or modified; whether
                the applicable benchmark standards should be modified or
                replaced by parity standards. The criterion for
                reclassification of a measure shall be whether the actual
                volume of data points was lesser or greater than anticipated.
                Criteria for review of performance measures, other than for
                possible reclassification, shall be whether there exists an
                omission or failure to capture intended performance, and
                whether there is duplication of another measurement.
                Performance measures for 911 may be examined at any six month
                review to determine whether they should be reclassified. The
                first six month period will begin when an agreement is adopted
                by CLEC and approved by the Commission. Any changes to
                existing performance measures shall be by mutual agreement of
                the parties and, if necessary, with respect to new measures and
                their appropriate classification, by arbitration. The current
                measurements and benchmarks will be in effect until modified
                hereunder or expiration of the agreement.



<PAGE>

                                                                   PAGE 4 OF 21

6.0     PERFORMANCE MEASUREMENTS

        SWBT will provide the following Performance Measurements, in accordance
        with the Business Rules, under this Agreement:

        6.1     Pre-Ordering/Ordering

                6.1.1   MEASUREMENT - Average Response Time For OSS
                        Pre-Order Interfaces
                        DEFINITION - The average response time in seconds from
                        the SWBT side of the Remote Access Facility (RAF) and
                        return for pre-order interfaces (Verigate, DataGate and
                        EDI where the pre-order functionality is integrated) by
                        function.
                        CALCULATION - Sigma[Query Response Date & Time)-(Query
                        Submission Date & Time)] DIVIDED BY (Number of Queries
                        Submitted in Reporting Period)
                        REPORT STRUCTURE -
                        BENCHMARK: TO BE DETERMINED
                      - ADDRESS VERIFICATION
                      - REQUEST FOR TELEPHONE NUMBER
                      - REQUEST FOR CUSTOMER SERVICE RECORD (CSR)
                      - SERVICE AVAILABILITY
                      - SERVICE APPOINTMENT SCHEDULING (DUE DATE)
                      - DISPATCH REQUIRED
                      - PIC

                6.1.2   MEASUREMENT - Percent Response Received Within "X"
                        Seconds
                        DEFINITION - The average response time in seconds from
                        the SWBT side of the Remote Access Facility (RAF) and
                        return for pre-order interfaces (Verigate and DataGate)
                        by function.
                        CALCULATION - Sigma[(Query Response Date & Time) -
                        (Query Submission Date & Time)]/(Number of Queries
                        Submitted in Reporting Period)
                        REPORT STRUCTURE - Reported on a company basis by
                        interface for DATAGATE and VERIGATE.
                        BENCHMARK: TO BE DETERMINED
                      - ADDRESS VERIFICATION
                      - REQUEST FOR TELEPHONE NUMBER
                      - REQUEST FOR CUSTOMER SERVICE RECORD (CSR)
                      - SERVICE AVAILABILITY
                      - SERVICE APPOINTMENT SCHEDULING (DUE DATE)
                      - DISPATCH REQUIRED
                      - PIC


<PAGE>

                                                                   PAGE 5 OF 21

                6.1.3   MEASUREMENT - EASE Average Response Time
                        DEFINITION - Average screen to screen response from the
                        SWBT side of the Remote Access Facility (RAF) and return
                        CALCULATION - Sigma[(Query Response Date & Time) -
                        (Query Submission Date & Time)] DIVIDED BY (Number of
                        Queries Submitted in Reporting Period)
                        REPORT STRUCTURE - Reported for all CLECs and SWBT by
                        division name (CPU platform)
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.1.4   MEASUREMENT - OSS Interface Availability
                        DEFINITION - Percent of time OSS interface is available
                        compared to scheduled availability
                        CALCULATION - ((# scheduled system available hours -
                        unscheduled unavailable system hours) DIVIDED BY
                        scheduled system available hours)) * 100
                        REPORT STRUCTURE - Reported on a company basis by
                        interface e.g. EASE, DATAGATE, VERIGATE, LEX, EDI and
                        TOOLBAR. The RAF will be reported by CLEC
                        BENCHMARK - 99%

                6.1.5   MEASUREMENT - % Firm Order Confirmations (FOCs) Received
                        Within "X" Hours
                        DEFINITION - Percent of FOCs returned within a specified
                        time frame from receipt of service requests to return of
                        confirmation to CLEC All Res. And Bus. < 24 Hours
                        Complex Business - Negotiated
                        CALCULATION - (# FOCs returned within "X" hours DIVIDED
                        BY total FOCs sent) * 100.
                        REPORT STRUCTURE - Reported for CLEC and all CLECs. This
                        includes mechanized from EDI and LEX and manual (FAX or
                        phone orders). The FOC for EASE is considered to be at
                        the time the due date is negotiated and is not included
                        in the calculation.
                        BENCHMARK - 90% within "X" hours

                6.1.6   MEASUREMENT - Average Time To Return FOC
                        DEFINITION - The average time to return FOC from receipt
                        of service order to return of confirmation to CLEC
                        CALCULATION - Sigma[(Date and Time of FOC) - (Date and
                        Time of Order Acknowledgment)] DIVIDED BY (# of FOCs)
                        REPORT STRUCTURE - Reported for CLEC and all CLECs
                        BENCHMARK - 90% within "X" hours

                6.1.7   MEASUREMENT - Percent Mechanized Completions Returned
                        Within 1 Hour Upon Successful Execution Of The SORD
                        (BU340) Batch Cycle


<PAGE>

                                                                   PAGE 6 OF 21

                        Which Updates The Order Status, Indicating A Completion
                        Notice. The batch process executes at the following
                        times: 9:00 AM, 12:00 noon, 3:00 PM, 6:00 PM, 10:30 PM.
                        DEFINITION - % mechanized completions returned within 1
                        hour for EDI and LEX
                        CALCULATION - (# mechanized completions returned to CLEC
                        within 1 hour DIVIDED BY total completions) * 100
                        REPORT STRUCTURE - Reported for CLEC and all CLECs for
                        the electronic interfaces (EDI and LEX). The 1 hour
                        interval above is subject to change as the EDI polling
                        time frame changes
                        BENCHMARK - 97%

                6.1.8   MEASUREMENT - Average Time to Return Mechanized
                        Completions
                        DEFINITION - Average time required to return a
                        mechanized completion
                        CALCULATION - Sum [(Date and Time of Notice Of
                        Completion Issued to the CLEC) -(Date and Time of Work
                        Completion)]DIVIDED BY(# of Orders Completed).
                        REPORT STRUCTURE - Reported on CLEC and all CLECs for
                        the electronic interfaces (EDI and LEX). The 1 hour
                        interval is subject to change as the EDI polling time
                        frame changes
                        BENCHMARK - 97%

                6.1.9   MEASUREMENT - Percent Rejects
                        DEFINITION - The number of rejects compared to the
                        issued orders for the electronic interfaces (EDI, RMI
                        and LEX)
                        CALCULATION - (# of rejects DIVIDED BY total orders
                        issued) * 100
                        REPORT STRUCTURE - Reported on CLEC and all CLECs for
                        the electronic interfaces (EDI and LEX)
                        BENCHMARK - Not required (Diagnostic)

                6.1.10  MEASUREMENT - Percent Mechanized Rejects Returned Within
                        1 Hour Of The Start Of The EDI/LASR Batch Process
                        DEFINITION - Percent mechanized rejects returned within
                        1 hour of the start of the EDI/LASR batch process. The
                        EDI and LASR processes execute every two hours between
                        6:00 A.M. and 12:00 A.M
                        CALCULATION - (# mechanized rejects returned within 1
                        hour DIVIDED BY total rejects) * 100
                        REPORT STRUCTURE - Reported for CLEC and all CLECs for
                        the electronic interfaces (EDI and LEX
                        BENCHMARK - 97% within I hour of PON

                6.1.11  MEASUREMENT - Mean Time to Return Mechanized Rejects
                        DEFINITION - Average time required to return a
                        mechanized reject


<PAGE>

                                                                   PAGE 7 OF 21

                        CALCULATION - E[(Date and Time of Order Rejection) -
                        (Date and Time of Order Acknowledgment)]+ (# of Orders
                        Rejected)
                        REPORT STRUCTURE - Reported on CLEC and all
                        CLECs for the electronic interfaces (EDI and LEX)
                        BENCHMARK - 97% within I hour of PON

                6.1.12  MEASUREMENT - Mechanized Provisioning Accuracy
                        DEFINITION - Percent of mechanized orders completed as
                        ordered
                        CALCULATION - (# of order's completed as ordered DIVIDED
                        BY total orders) * 100
                        REPORT STRUCTURE - Reported by individual CLEC, CLECs
                        and SWBT
                        BENCHMARK - EQUAL TO SWBT's OWN

                6.1.13  MEASUREMENT - Order Process Percent Flow Through
                        DEFINITION - Percent of orders or LSRs from entry to
                        distribution that progress through SWBT ordering systems
                        excluding rejects
                        CALCULATION - (# of "good" orders that flow through
                        DIVIDED BY total orders) * 100
                        LASR orders that flow through are those orders that
                        go to the mechanized order generation (MOG). Total
                        orders are the sum or orders that go to the MOG and
                        those that go to folders for manual handling. EASE
                        orders that flow through are those orders that are
                        issued by using the PF11 key and do not go to the
                        error queue. The total orders are all PF11 issued
                        orders.
                        REPORT STRUCTURE - Reported by individual
                        CLEC, CLECs and SWBT for CLEC typed orders and LSC typed
                        orders
                        BENCHMARK - EQUAL TO SWBT'S OWN

        6.2     BILLING

                6.2.14  MEASUREMENT - Billing Accuracy
                        DEFINITION - SWBT performs three bill audits to
                        ensure the accuracy of the bills rendered to its
                        customers: CRIS and toll/usage. A sample of customer
                        accounts is selected on the basis of USOCs and
                        classes of service using CIDB. The purpose of this
                        audit is to assure that the monthly bill sent to the
                        CLECs for resale services is accurate according to
                        the rating of the USOCs and classes of service. For
                        all accounts that are audited, the numbers of bills
                        that have been released prior to correction are
                        counted as an error.
                        CALCULATION - (# of bills not corrected prior to
                        bill release DIVIDED BY total bills audited) * 100
                        REPORT STRUCTURE - Reported for aggregate of all CLECs
                        and SWBT for the CRIS, and Usage bill audits
                        BENCHMARK - EQUAL TO SWBT's OWN


<PAGE>

                                                                   PAGE 8 OF 21

                6.2.15  MEASUREMENT - Percent of Accurate And Complete Formatted
                        Mechanized Bills
                        DEFINITION - Measurements the % of monthly bills sent
                        to the CLECs via the mechanized EDI process that are
                        accurate and complete. if an error is found, a
                        decision must be made to correct the error before the
                        bill is rendered and jeopardize timeliness or to send
                        the bill out on time and in error.
                        CALCULATION - (Count of accurate and complete formatted
                        mechanized bills via EDI DIVIDED BY total # of
                        mechanized bills via EDI) * 100
                        REPORT STRUCTURE - Reported for CLEC and all CLECs
                        BENCHMARK - 99%

                6.2.16  MEASUREMENT - Percent Of Billing Records Transmitted
                        Correctly

                        DEFINITION - Measurements % of billing records
                        transmitted correctly on the usage extract feed. Usage
                        records are sent to the CLEC each day containing
                        information to enable the CLEC to more promptly bill
                        their own customers. Controls and edits within the
                        billing system uncover certain types of errors, which
                        are likely to appear on the usage records. When these
                        errors are uncovered, a new release of the program will
                        be written to insure that the error does not occur
                        again. Thus, an error that is reported in one month
                        should not occur the next month because the billing
                        program error would have fixed by the next month.
                        CALCULATION - (Count of billing records transmitted
                        correctly DIVIDED BY total billing records transmitted)
                        * 100
                        REPORT STRUCTURE - Reported for CLEC and all CLECs
                        BENCHMARK - 95%

                6.2.17  MEASUREMENT - Billing Completeness
                        DEFINITION - Percent of service orders that are posted
                        in the CRIS billing system prior to the customers bill
                        period
                        CALCULATION - (Count of service orders included in
                        current applicable bill period DIVIDED BY total service
                        orders in current applicable bill period) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.2.18  MEASUREMENT - Billing Timeliness (Wholesale Bill)
                        DEFINITION - Billing timeliness measurements the length
                        of time from message creation to the time it is made
                        available to the CLECS. Data is collected from a
                        transmission report obtained each month from CIDB. A
                        mechanized bill will be considered timely if it is sent
                        by midnight of the 6th work day after the end of the
                        bill period. Since


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                                                                   PAGE 9 OF 21

                        paper bills are handled via the same process that SWBT
                        uses for paper distribution no measurement is provided.
                        CALCULATION - (Count of bills released on time
                        DIVIDED BY total number of bills released) * 100
                        REPORT STRUCTURE - Reported for CLEC and all CLECs
                        BENCHMARK - 95% within the 6th work day

                6.2.19  MEASUREMENT - Daily Usage Feed Timeliness
                        DEFINITION - Usage information is sent to the CLECs on
                        a daily basis. This usage data must be sent to the CLEC
                        within 6 days in order to be considered timely.
                        CALCULATION - (Number of usage feeds transmitted on time
                        DIVIDED BY total number of usage feeds) * 100
                        REPORT STRUCTURE - Reported for CLEC and all CLECs
                        BENCHMARK - 95% within the 6th work day

                6.2.20  MEASUREMENT - Unbillable Usage
                        DEFINITION - Percentage of usage data that is
                        unbillable. For CRIS billing, the total dollars for
                        AMA/ECS write off is divided by the total CRIS AMA/ECS
                        billing.
                        CALCULATION - (Total unbillable usage DIVIDED BY total
                        usage)* 100
                        REPORT STRUCTURE - Reported for the aggregate of SWBT
                        and CLECs
                        BENCHMARK - Not required (Aggregate measurement)

        6.3     MISCELLANEOUS ADMINISTRATIVE

                6.3.21  MEASUREMENT - LSC Average Speed Of Answer
                        DEFINITION - The average time a customer is in queue.
                        The time begins when the customer enters the queue and
                        ends when the call is answered by a SWBT representative
                        CALCULATION - Total queue time DIVIDED BY total calls
                        REPORT STRUCTURE - Reported for all calls to the LSC by
                        operational separation and SWBT retail
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.3.22  MEASUREMENT - LSC Grade Of Service (GOS)
                        DEFINITION - % of calls answered by the LSC within a
                        specified period of time
                        CALCULATION - Total number of calls answered by
                        the LSC within a specified period of time DIVIDED BY
                        total number of calls answered by the LSC
                        REPORT STRUCTURE - Reported for all calls to the LSC
                        by operational separation and SWBT retail (RSC and BSC)
                        BENCHMARK - EQUAL TO SWBT'S OWN



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                                                                  PAGE 10 OF 21

                6.3.23  MEASUREMENT - Percent Busy in the LSC
                        DEFINITION - Percent of calls which are unable to reach
                        the Local Service Center due to a busy condition in the
                        ACD
                        CALCULATION - (Count of blocked calls DIVIDED BY total
                        calls offered) * 100
                        REPORT STRUCTURE - Reported for all CLECs and SWBT
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.3.24  MEASUREMENT - LOC Average Speed Of Answer
                        DEFINITION - The average time a customer is in queue.
                        The time begins when the customer enters the queue and
                        ends when the call is answered by a SWBT representative
                        CALCULATION - Total queue time DIVIDED BY total calls
                        REPORT STRUCTURE - Reported for all calls to the LOC for
                        all CLECs and SWBT retail
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.3.25  MEASUREMENT - LOC Grade Of Service (GOS)
                        DEFINITION - % of calls answered by the LOC within a
                        specified period of time
                        CALCULATION - Total number of calls answered by the LOC
                        within a specified period of time DIVIDED BY total
                        number of calls answered by the LOC
                        REPORT STRUCTURE - Reported for all calls to the LSC by
                        operational separation and SWBT retail (Repair Bureau)
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.3.26  MEASUREMENT - Percent Busy in the LOC
                        DEFINITION - Percent of calls which are unable to reach
                        the Local Operations Center due to a busy condition in
                        the ACD
                        CALCULATION - (Count of blocked calls DIVIDED BY total
                        calls offered) * 100
                        REPORT STRUCTURE - Reported for all CLECs and SWBT
                        BENCHMARK - EQUAL TO SWBT'S OWN

        6.4     POTS - PROVISIONING

                6.4.27  MEASUREMENT - Mean Installation Interval
                        DEFINITION - Average business days from application date
                        to completion date for N, T, C orders excluding customer
                        caused misses and customer requested due dates that are
                        earlier or greater than 5 business days
                        CALCULATION - [Sigma (completion date - application
                        date)] DIVIDED BY (Total number of orders completed)



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                                                                 PAGE 11 OF 21

                        REPORT STRUCTURE - Reported for CLEC, all CLECs and
                        SWBT, by Field Work (FW), No Field Work (NFW), Business
                        and Residence
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.28  MEASUREMENT - Percent Installations Completed Within "X"
                        Business Days (POTS)
                        DEFINITION - Measure of orders completed within "X"
                        business days, 5 business days for FW and 3 business
                        days for NFW, of receipt of confirmed service order for
                        POTS resale service excluding orders where customer
                        requested a due date greater than "X" business days and
                        excluding orders with only customer caused misses
                        CALCULATION - (Count of N,T,C orders installed within
                        business 5 days DIVIDED BY total N,T,C orders)* 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        by Field Work (FW), No Field Work (NFW), Business and
                        Residence
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.29  MEASUREMENT - Percent SWBT Caused Missed Due Dates
                        DEFINITION - Percent of N,T,C orders where installation
                        was not completed by the due date, excluding customer
                        caused misses
                        CALCULATION - (Count of N,T,C orders not completed by
                        the due date, excluding customer caused misses DIVIDED
                        BY total number of N,T,C orders) * 100
                        REPORT STRUCTURE - Reported for CLEC all CLECs and SWBT
                        by Field Work (FW), No Field Work (NFW), Business and
                        Residence
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.30  MEASUREMENT - Percent SWBT Missed Due Dates Due To Lack
                        Of Facilities
                        DEFINITION - Percent N,T,C orders with missed committed
                        due dates due to lack of facilities
                        CALCULATION - (Count N,T,C orders with missed committed
                        due dates due to lack of facilities DIVIDED BY total
                        N,T,C orders) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        Retail for POTS Reported for > 30 calendar days & > 90
                        calendar days (Calculated monthly based on posted
                        orders)
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.31  MEASUREMENT - Average Delay Days For Missed Due Dates
                        Due To Lack Of Facilities
                        DEFINITION - Average calendar days from due date to
                        completion date on company missed orders due to lack
                        of facilities
                        CALCULATION - Sigma(Completion date - committed order
                        due date) DIVIDED BY (# of posted orders)

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                                                                   PAGE 12 OF 21

                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        Retail POTS
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.32  MEASUREMENT - Average Delay Days for SWBT Caused Missed
                        Due Dates
                        DEFINITION - Average calendar days from due date to
                        completion date on company missed orders
                        CALCULATION - Sum (Completion date - committed order due
                        date) DIVIDED BY (# of posted orders)
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        Retail POTS,
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.33  MEASUREMENT - Percent SWBT Caused Missed Due Dates > 30
                        Days
                        DEFINITION - Percent of N,T,C orders where installation
                        was completed > 30 days following the due date,
                        excluding customer caused misses
                        CALCULATION - (Count of N, T, C orders completed > 30
                        days following the due date, excluding customer caused
                        misses DIVIDED BY total number of N, T, C orders) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        for Resold POTS
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.34  MEASUREMENT - Count of Orders Canceled After the Due
                        Date (SWBT Caused)
                        DEFINITION - Orders canceled after the due date caused
                        by SWBT
                        CALCULATION - (1-30, 31-90, and > 90 DIVIDED BY count
                        of canceled orders)
                        REPORT STRUCTURE - Reported for individual CLECs and the
                        aggregate of all CLECs
                        BENCHMARK - Not required (Diagnostic)

                6.4.35  MEASUREMENT - Percent Trouble Reports Within 10 Days Of
                        Install
                        DEFINITION - Percent of N, T, C orders that receive a
                        network customer trouble report not caused by CPE or
                        wiring within 10 calendar days of service order
                        completion excluding subsequent reports and all
                        disposition code "13" reports 6
                        CALCULATION - (Count of N, T, C orders that receive a
                        network customer trouble report within 10 calendar days
                        of service order completion DIVIDED BY total N,T,C
                        orders (excludes trouble reports received on the due
                        date))* 100



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                                                                   PAGE 13 OF 21


                        REPORT STRUCTURE - Reported for POTS Resale by CLEC,
                        total CLECs and SWBT retail by Field Work (FW), No Field
                        Work (NFW) business and residence
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.4.36  MEASUREMENT - Percent No Access (Trouble Reports With No
                        Access)
                        DEFINITION - Percent of Field Work (FW) orders with
                        a status of "No Access"
                        CALCULATION - Count of orders that are No Access DIVIDED
                        BY total orders
                        REPORT STRUCTURE - Reported for CLEC, total CLECs and
                        SWBT
                        BENCHMARK - Resale POTS parity between FW compared to
                        SWBT FW (N, T, C order types) and NFW compared to SWBT
                        Retail NFW (N,T,C order types).

        6.5     POTS - MAINTENANCE

                6.5.37  MEASUREMENT - Trouble Report Rate
                        DEFINITION - The number of customer trouble reports not
                        caused by CPE or wiring, CPE and disposition code "13"
                        reports within a calendar month per 100 lines
                        CALCULATION - [Total number of customer trouble reports
                        DIVIDED BY (total lines DIVIDED BY 100)].
                        REPORT STRUCTURE - Reported for POTS Resale trouble
                        reports by CLEC, all CLECs and SWBT retail (valid for
                        line counts of 300,000 or greater)
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.5.38  MEASUREMENT - Percent Missed Repair Commitments
                        DEFINITION - Percent of trouble reports not cleared by
                        the commitment time, excluding disposition code "13"
                        reports
                        CALCULATION - (Count of trouble reports not cleared by
                        the commitment time for company reasons DIVIDED BY total
                        trouble reports) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        retail by dispatch and no dispatch
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.5.39  MEASUREMENT - Receipt To Clear Duration
                        DEFINITION - Average duration of customer trouble
                        reports from the receipt of the customer trouble report
                        to the time the trouble report is cleared with the
                        customer excluding subsequent, and all disposition code
                        "13" reports (excludable)



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                                                                   PAGE 14 OF 21

                        CALCULATION - sigma[(Date and time ticket is cleared
                        with customer) - (Date and time ticket received)]
                        DIVIDED BY total customer network trouble reports
                        REPORT STRUCTURE - Reported for POTS Resale trouble
                        reports by CLEC, all CLECs and SWBT retail for Out of
                        Service and Affecting Service by Dispatch and
                        No-Dispatch
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.5.40  MEASUREMENT - Percent Out Of Service (OOS) < 24 Hours
                        DEFINITION - Percent of OOS trouble reports cleared in
                        less than 24 hours excluding subsequents, tickets
                        received on Saturday or Sunday, no access and all
                        disposition code "13" reports (excludable)
                        CALCULATION - (Count of OOS trouble reports < 24 hours
                        DIVIDED BY total number of OOS trouble reports) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        retail
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.5.41  MEASUREMENT - Percent Repeat Reports
                        DEFINITION - Percent of customer trouble reports
                        received within 10 calendar days of a previous customer
                        report that were not caused by CPE or wiring excluding
                        subsequent reports and all disposition code "13"
                        reports. (excludable)
                        CALCULATION - (Count of customer trouble reports, not
                        caused by CPE or wiring and excluding subsequent
                        reports, received within 10 calendar days of a previous
                        customer report DIVIDED BY total customer trouble
                        reports not caused by CPE or wiring and excluding
                        subsequent reports)*100
                        REPORT STRUCTURE - Reported by CLEC, all CLECs and SWBT
                        retail
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.5.42  MEASUREMENT - Percent No Access (% Trouble reports
                        with No Access).
                        DEFINITION - Percent of dispatched customer trouble
                        reports with a status of "No Access".
                        CALCULATION - Count of trouble reports with a status of
                        "No Access" to customer's premise DIVIDED BY total
                        dispatched customer trouble reports
                        REPORT STRUCTURE - Reported for CLEC, total CLECs and
                        SWBT
                        BENCHMARK - POTS - Parity with SWBT Retail

        6.6     SPECIALS - PROVISIONING

                6.6.43  MEASUREMENT - Average Installation Interval
                        DEFINITION - Average business days from application
                        date to completion date for N,T,C orders by item.
                        Excludes customer caused

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                                                                   PAGE 15 OF 21


                        misses and customer requested due dates that are earlier
                        or greater than "X" business days
                        CALCULATION - [Sigma(completion date - application
                        date)] DIVIDED BY (total number of orders completed)
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        by DDS, DS1, DS3, Voice Grade Private Line (VGPL) and
                        ISDN and any other services available for resale
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.6.44  MEASUREMENT - Percent Installations Completed Within "X"
                        Business Days
                        DEFINITION - Percent installations completed within "X"
                        business days excluding customer caused misses and
                        customer requested due date greater than "X" business
                        days
                        CALCULATION - (Count of N,T,C orders by item installed
                        within business "X" business days DIVIDED BY total N,T,C
                        orders by item) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        by DDS, DS1, DS3, Voice Grade Private Line (VGPL) and
                        ISDN and any other services available for resale
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.6.45  MEASUREMENT - Percent SWBT Caused Missed Due Dates
                        DEFINITION - Percent of N,T,C orders where installations
                        were not completed by the negotiated due date excluding
                        customer caused misses
                        CALCULATION - (Count of N,T,C orders by item with missed
                        due dates excluding customer caused misses DIVIDED BY
                        total number of N,T,C orders by item) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and
                        SWBT by DDS, DS1, DS3, Voice Grade Private Line (VGPL)
                        and ISDN and any other services available for resale
                        BENCHMARK- EQUAL TO SWBT'S OWN

                6.6.46  MEASUREMENT - Percent Installation Reports Within 30
                        Days (I-30)
                        DEFINITION - Percent of N,T,C orders by item that
                        receive a network customer trouble report within 30
                        calendar days of service order completion
                        CALCULATION - (Count of N,T,C orders by item that
                        receive a network customer trouble report within 30
                        calendar days of service order completion DIVIDED BY
                        total N,T,C orders by item (excludes trouble reports
                        received on the due date)) * 100

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                                                                   PAGE 16 OF 21


                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        by DDS, DS1, DS3, Voice Grade Private Line (VGPL) and
                        ISDN and any other services available for resale
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.6.47  MEASUREMENT - Percent SWBT Missed Due Dates Due To Lack
                        Of Facilities
                        DEFINITION - Percent N,T,C orders by item with missed
                        committed due dates due to lack of facilities
                        CALCULATION - (Count of N,T,C orders by item with missed
                        committed due dates due to lack of facilities DIVIDED
                        BY total N,T,C orders by item) * 100
                        REPORT STRUCTURE - Reported for Specials Resale by CLEC,
                        all CLECs and SWBT Retail Reported for > 30 calendar
                        days & > 90 calendar days
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.6.48  MEASUREMENT - Delay Days For Missed Due Dates Due To
                        Lack Of Facilities
                        DEFINITION - Average calendar days from due date to
                        completion date on company missed orders due to lack of
                        facilities
                        CALCULATION - Sigma(Completion date - Committed order
                        due date) DIVIDED BY (# of completed orders)
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        Retail Specials
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.6.49  MEASUREMENT - Delay Days for SWBT Caused Missed Due
                        Dates
                        DEFINITION - Average calendar days from due date to
                        completion date on company missed orders
                        CALCULATION - Sum (Completion date - committed order due
                        date) DIVIDED BY (# of posted orders)
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        Retail Specials
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.6.50  MEASUREMENT - Percent SWBT Caused Missed Due Dates > 30
                        Days
                        DEFINITION - Percent of N, T, C orders where
                        installation was completed > 30 days following the due
                        date, excluding customer caused misses
                        CALCULATION - (Count of N, T, C orders completed > 30
                        days following the due date, excluding customer caused
                        misses DIVIDED BY total number of N, T, C orders) * 100

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                                                                   PAGE 17 OF 21


                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        for Retail Specials
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.6.51  MEASUREMENT - Count Of Orders Canceled After The Due
                        Date (SWBT Caused)
                        DEFINITION - Orders canceled after the due date which
                        were caused by SWBT
                        CALCULATION - (1-30, 31-90, and > 90 DIVIDED BY the
                        count of canceled orders)
                        REPORT STRUCTURE - Reported for individual CLECs and the
                        aggregate of all CLECs
                        BENCHMARK - Not required (Diagnostic)

        6.7     SPECIALS - MAINTENANCE

                6.7.52  MEASUREMENT - Mean Time To Restore
                        DEFINITION - Average duration of network customer
                        trouble reports from the receipt of the customer trouble
                        report to the time the trouble report is cleared
                        excluding no access and delayed maintenance
                        CALCULATION - Sigma[(Date and time trouble report is
                        cleared with the customer) - (date and time trouble
                        report is received)] DIVIDED BY total network customer
                        trouble reports
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        by DDS, DS1, DS3, Voice Grade Private Line (VGPL) and
                        ISDN and any other services available for resale
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.7.53  MEASUREMENT - Percent Repeat Reports
                        DEFINITION - Percent of network customer trouble reports
                        received within 30 calendar days of a previous customer
                        report
                        CALCULATION - (Count of network customer trouble reports
                        received within 30 calendar days of a previous customer
                        report DIVIDED BY total network customer trouble
                        reports.) * 100
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        by DDS, DS1, DS3, Voice Grade Private Line (VGPL) and
                        ISDN and any other services available for resale
                        BENCHMARK - EQUAL TO SWBT'S OWN

                6.7.54  MEASUREMENT - Failure Frequency
                        DEFINITION - The number of network customer trouble
                        reports within a calendar month per 100 circuits
                        CALCULATION - [Count of network trouble reports DIVIDED
                        BY (Total Resold circuits DIVIDED BY 100)]
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                                                                 PAGE 18 OF 21

                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        by DDS, DS1, DS3, Voice Grade Private Line (VGPL) and
                        ISDN and any other services available for resale
                        BENCHMARK - EQUAL TO SWBT's OWN

        6.11    DIRECTORY ASSISTANCE (DA) AND OPERATOR SERVICES (OS)

                6.11.55 MEASUREMENT - Directory Assistance Grade Of Service
                        DEFINITION - % of directory assistance calls answered
                        < 1.5, < 2.5, > 7.5, > 10.0, > 15.0, > 20.0, and > 25.0
                        seconds
                        CALCULATION - Calls answered within "X" seconds DIVIDED
                        BY total calls answered
                        REPORT STRUCTURE - Reported for the aggregate of SWBT
                        and CLECs
                        BENCHMARK - Not required (Aggregate measurement)

                6.11.56 MEASUREMENT - Directory Assistance Average Speed Of
                        Answer
                        DEFINITION - The average time a customer is in queue.
                        The time begins when the customer enters the queue and
                        ends when the call is answered by a SWBT representative
                        CALCULATION - Total queue time DIVIDED BY total calls
                        REPORT STRUCTURE - Reported for the aggregate of SWBT
                        and CLECs
                        BENCHMARK - Not required (Aggregate measurement)

                6.11.57 MEASUREMENT - Operator Services Grade Of Service
                        DEFINITION - % of operator services calls answered
                        < 1.5, < 2.5, > 7.5, > 10.0, > 15.0, > 20.0, and > 25.0
                        seconds
                        CALCULATION - Calls answered within "x" seconds DIVIDED
                        BY total calls answered
                        REPORT STRUCTURE - Reported for the aggregate of SWBT
                        and CLECs
                        BENCHMARK - Not required (Aggregate measurement)

                6.11.58 MEASUREMENT - Operator Services Average Speed Of Answer
                        DEFINITION - The average time a customer is in queue.
                        The time begins when the customer enters the queue and
                        ends when the call is answered by a SWBT representative
                        CALCULATION - Total queue time DIVIDED BY total calls
                        Structure - Reported for the aggregate of SWBT and CLECs
                        BENCHMARK - Not required (Aggregate measurement)

                6.11.59 MEASUREMENT - Percent Calls Abandoned
                        DEFINITION - The percent of calls where the customer
                        hangs up while the call is in queue
                        CALCULATION - (Number of calls abandoned DIVIDED BY
                        number of operator positions requested) * 100


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                                                                 PAGE 19 OF 21

                        REPORT STRUCTURE - Reported for CLEC and SWBT in the
                        aggregate
                        BENCHMARK - Not required (Aggregate measurement)

                6.11.60 MEASUREMENT - Percent Calls Deflected
                        DEFINITION - The percent of calls that are received and
                        are unable to be placed in queue
                        CALCULATION - (Number of calls deflected DIVIDED BY
                        number of operator positions requested) * 100
                        REPORT STRUCTURE - Reported for CLEC and SWBT in the
                        aggregate
                        BENCHMARK - Not required (Aggregate measurement)

                6.11.61 MEASUREMENT - Average Work Time
                        DEFINITION - the average number of seconds an operator
                        spends handling a customer's request for assistance in
                        obtaining a telephone number, placing a call at the
                        customer's request or in a position busy state. The
                        Average Work Time normally begins when the customer
                        connects to an operator position and ends when the
                        operator position releases the customer after serving
                        his/her request.
                        CALCULATION - Sum (Time operator position releases
                        customer - time customer connects to an operator
                        position) DIVIDED BY calls
                        REPORT STRUCTURE - Reported for CLEC and SWBT in the
                        aggregate
                        BENCHMARK - Not required (Aggregate measurement)

                6.11.62 MEASUREMENT - Non-Call Busy Work Volumes
                        DEFINITION - The amount of time in CCS (Centum Call
                        Second) that an operator has placed their position in
                        make busy or in a position busy state
                        CALCULATION - Sum (Time operator position in busy state
                        - time operator removed position from busy state)
                        REPORT STRUCTURE - Reported for CLEC and SWBT in the
                        aggregate
                        BENCHMARK - Not required (Aggregate measurement)

        6.14    911

                6.14.63 MEASUREMENT - Average Time To Clear Errors
                        DEFINITION - The average time it takes to clear an error
                        after it is detected during the processing of the 911
                        database file. The clock will start upon receipt of the
                        error file and end when the error is corrected. This is
                        only on resale orders that SWBT installs.
                        CALCULATION - sigma(Date and time error detected -
                        date and time error cleared) DIVIDED BY total number of
                        errors
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        BENCHMARK - EQUAL TO SWBT'S OWN

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                                                                   PAGE 20 OF 21


                6.14.64 MEASUREMENT - Percent Accuracy 911 Database Updates
                        DEFINITION - The percent of 911 records that were
                        updated by SWBT in error
                        CALCULATION - (Number of SWBT caused update errors
                        DIVIDED BY total number of updates) * 100
                        REPORT STRUCTURE - CLEC, all CLECs and SWBT
                        BENCHMARK - EQUAL TO SWBT'S OWN

        6.17    DIRECTORY ASSISTANCE DATA BASE

                6.17.65 MEASUREMENT - Percent DA Database Accuracy For Manual
                        Updates
                        DEFINITION - The percent of DA records that were updated
                        by SWBT in error. The data required to calculate this
                        measurement will be provided by the CLEC. The CLEC will
                        provide the number of records transmitted and the errors
                        found. SWBT will verify the records determined to be in
                        error to validate that the records were input by SWBT
                        incorrectly.
                        CALCULATION - (Number of SWBT caused update errors
                        DIVIDED BY total number of updates) * 100
                        REPORT STRUCTURE - Reported by CLEC and all CLECs for
                        facility based providers
                        BENCHMARK - 97% accuracy for DA database updates for the
                        manual DA process

                6.17.66 MEASUREMENT - Percent of Electronic Updates that flow
                        Through the DSR Process Without Manual Intervention
                        DEFINITION - Percent of DSRs from entry to distribution
                        that progress through SWBT ordering systems to ALPS/LIRA
                        CALCULATION - (Number of DSRs that flow through to
                        ALPS/LIRA DIVIDED BY total LSRs)* 100
                        REPORT STRUCTURE - CLEC and all CLECs
                        BENCHMARK - 97%

        6.19 NXX

                6.19.67 MEASUREMENT - Percent NXXs Loaded And Tested Prior To
                        The LERG Effective Date
                        DEFINITION - The percent of NXXs loaded and tested prior
                        to the LERG effective date
                        CALCULATION - (Count of NM loaded and tested by LERG
                        date DIVIDED BY total NXXs loaded and tested) * 100
                        REPORT STRUCTURE - Reported by CLEC, all CLECs and SWBT
                        BENCHMARK - EQUAL TO SWBT's OWN

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                6.19.68 MEASUREMENT - Average Delay Days For NXX Loading And
                        Testing
                        DEFINITION - Average calendar days from due date to
                        completion date on company missed NXX orders
                        CALCULATION - Sum (Completion date - LERG date)
                        DIVIDED BY (number of orders)
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and
                        SWBT
                        BENCHMARK - Equal to SWBT's own

                6.19.69 MEASUREMENT - Mean Time To Repair
                        DEFINITION - Average calendar days from due date to
                        completion date on company missed NXX orders
                        CALCULATION - Sum (Completion date - LERG date)
                        DIVIDED BY (number of orders)
                        REPORT STRUCTURE - Reported for CLEC, all CLECs and SWBT
                        BENCHMARK - EQUAL TO SWBT'S OWN

7.0     APPLICABILITY OF OTHER RATES, TERMS AND CONDITIONS

        7.1     This appendix, and every service provided hereunder, shall be
                subject to all rates, terms and conditions contained in this
                Agreement or any other appendices or attachments to this
                Agreement which are legitimately related to such service; and
                all such rates, terms and conditions are incorporated by
                reference herein and as part of every service provided
                hereunder. Without limiting the general applicability of the
                foregoing, the following terms and conditions of the General
                Terms and Conditions are specifically agreed by the Parties to
                be legitimately related to, and to be applicable to, each
                service Provided hereunder: definitions, interpretation and
                construction, notice of changes, general responsibilities of the
                Parties, effective date, terra, termination, disclaimer of
                representations and warranties, changes in end user local
                exchange service provider selection, severability, intellectual
                property, indemnification, limitation of liability, force
                majeure, confidentiality, disputed amounts, dispute resolution,
                intervening law and miscellaneous.