Responsible Involvement:

BellSouth is a heavily regulated company at the local, state and federal level. We operate in a highly competitive industry governed by regulations from a bygone era. The way people communicate has changed drastically over the last few years and our country's communications laws must be updated to reflect that reality. BellSouth has a significant stake in how this transition will be accomplished. It is therefore imperative that BellSouth actively participate in the political process. In doing so, BellSouth strives to act ethically and responsibly, in a manner that is consistent with the values and practices espoused in our Code of Conduct.

Under federal law, BellSouth is prohibited from contributing corporate funds or making in-kind contributions to candidates for federal office or to national party committees. BellSouth is permitted by federal and state law to make contributions to political parties, candidates, political action committees (PACs), and other political organizations, and may do so under appropriate circumstances. BellSouth evaluates the appropriateness of each contribution. Even when applicable law permits us to make a corporate political contribution, BellSouth may exercise its right not to do so.

All contributions are made in accordance with the procedures described below, which provide for the evaluation of the legality and appropriateness of every contribution. This process is subject to the oversight of our Board of Directors.

Process for Corporate Contributions:

The Bipartisan Campaign Reform Act (BCRA) sets forth rules and regulations pertaining to political contributions at the federal level. In making political contributions, BellSouth complies with BCRA and applicable state laws. Requests and recommendations for corporate political contributions typically are received and made by senior management in the BellSouth Regulatory and External Affairs organization. If the contribution is at the state level, the recommendation is generally made to BellSouth's State President. If the contribution is at the federal level, the recommendation is made to BellSouth's Vice President of Governmental Affairs.

Once a recommendation is made, BellSouth's Legal Department reviews the proposed contribution. If the Legal Department approves the contribution, it is then reviewed by BellSouth's President of Regulatory and External Affairs. If approved, the contribution request is processed via BellSouth's standard vouchering process.

BellSouth adheres to all disclosure and reporting obligations related to its corporate political contributions. Such reports are filed with and available from the appropriate government agencies.

Employee Involvement:

BellSouth administers and pays the administrative expenses of the BellSouth Corporation Employees' Federal Political Action Committee (Fed-PAC), a political action committee registered with the Federal Election Commission. The Fed-PAC is funded through employee contributions. All employee contributions are entirely voluntary, and employees have a right not to participate without fear of reprisal. Corporate funds cannot be and are not used to fund the Fed-PAC. All contributions to candidates for federal office made through the Fed-PAC are reported in accordance with Federal Election Commission requirements.

BellSouth also administers and pays expenses of various employee PACs in its nine-state region. The state PACs are funded through employee contributions and may also be funded in part by corporate funds if permitted by state law. All employee contributions are entirely voluntary and employees have a right not to participate without fear of reprisal. All contributions to candidates for state office made through BellSouth's state PACs are both made and reported pursuant to applicable state law.

With regard to BellSouth's Fed-PAC and its state PACs, decisions concerning disbursements are made by Disbursal Committees comprised of management employees representing a cross-section of business units. The Disbursal Committees meet regularly to consider and approve disbursements. The Disbursal Committee members present a slate of candidates and political committees they wish to support and provide rationale for that support. After discussion, the Disbursal Committees decide whether to approve the proposed contributions.

BellSouth encourages its employees to be involved in the political process as individual citizens by voting, volunteering time, keeping informed on political matters, and contributing money to the candidates of their choice. As a general matter, participation in personal political activities should not be done on company time. Depending on the circumstances, it may be in violation of state or federal law to use company resources and assets to support a political candidate or campaign. BellSouth encourages its employees to consult the Legal Department for guidance in this complex area.

Employees are not permitted to use their position in BellSouth to coerce or pressure other employees to make contributions or to support or oppose candidates. Unless authorized to do so by the Company, employees are prohibited from engaging in any overt, visible and partisan political activity that could cause someone to believe that an employee's actions reflect the views of BellSouth. Individuals engaging in political campaign activities should do so as private citizens and not on behalf of BellSouth, unless authorized to do so by the Company. BellSouth will not reimburse or otherwise compensate an employee for political contributions.

Resources:

Information about contributions to candidates, political committees, party committees, and political organizations is publicly available on Internet Web sites. Information pertaining to BellSouth's Federal PAC contributions may be found at the Federal Elections Commissions' Web site: http://herndon1.sdrdc.com/cgi-bin/com_supopp/C00174060/. Information pertaining to corporate and individual political contributions may be found at both of these Web sites: www.politicalmoneyline.com and www.opensecrets.org. Information pertaining to the realities of the communications marketplace and the need to update our nation's communications laws can be found at www.thefuturefaster.com.