Karen Jennings Senior Executive Vice President Human Resources and Communications

SBC Communications Inc. 175 E. Houston Street San Antonio, TX 78205 210.351.2525 Phone 210.351.2274 Fax

November 8, 2004

Mr. Ralph Kolderup
President AASBCR
P.O. Box 3366
Barrington, Il. 60011-3366

Dear Mr. Kolderup:

I understand the meeting with Ken Fenoglio and other Human Resources representatives went well.  I wanted to take this opportunity to sum up what I believe to be the status on the issues outlined in your August letter and discussed on October 20th with the AASBCR group.

Mounting health care premium costs for Medicare eligible retirees:  The group expressed concern over the significant increases to retiree healthcare premiums and out of pocket costs.

Communications to retirees related to changing benefit plans:  most of the discussion was targeted at the timing of communications and the expressed concern was that retirees need more time to digest changes coming their way.  I agree that timing is a critical element, one we very carefully consider in the planning of our communications.  It is a delicate balance that must be achieved between giving participants advance notice and making sure that the communications are related in a timely way to the event.  We will continue to keep "timing" in the forefront of our communicatgions planning process.  And for significant changes in the medical networks, we agreed those changes will be forwarded to you as soon as we know about these changes from our plan administrators.

Confusing concession announcements:  as concession was discussed, it became apparent that there may in fact be a billing problem.  Norma Gonzalez agreed to pursue that issue upon receipt of the invividual specifics.  She has not received tghis information to date, but will look into this as soon as it is received from those who attended the meeting.

What are the plans for retiree benefits:  the group reiterated that AASBCR wants to make sure that retiree issues and concerns are being heard.  They asked for a "voice on benefit issues".  While I can't commit to a formal voice that would entail any level of actual suthority, I commit to you that the retiree issues are being considered at the highest level of SBC management.  Decisions affecting retirees receive a very thorough analysis and significant consideration.  And, while the Company must maintain its flexibility to modify benefit plans, we are interested in your opinioins.  The final outcome of this discussion was agreement to create an advisory panel between AASBCR, the Midwest HR organization and Benefits.  For the time being, this group will meet on a periodic or as-needed basis.  My organization has committed to chairing these meetings when necessary.

In addition, the AASBCR representatives mentioned that you had some specific issues associated with United Healthcare and Caremark service, but those details were not available.  We are very interested in your feedback and once we receive your questions and comments, we will be happy to look into these situations and provide you answers.

In summary, the feedback I received was that it was a positive meeting.  And the group agreed it is wise to keep the communication channels open.  I certainly agree that would be positive thing.

Sincerely,

Karen Jennings