Compaq Computer Corporation Partners with GTE to Provide Internet Service; Offers U.S. Consumers Compaq Easy Internet Access Powered by GTE

Home PC industry leader Compaq Computer Corporation (NYSE: CPQ) has entered into a four-year agreement with GTE Corporation (NYSE: GTE) to offer U.S. consumers Compaq Easy Internet Access powered by GTE. Under the terms of the agreement, Compaq and GTE Internetworking, a division of GTE, will offer competitively priced dial-up Internet access to all Compaq Presario PC customers beginning today.

'Starting today, Compaq is the first home-computing company to deliver a far easier and more powerful experience when navigating the Internet,' said Rod Schrock, Vice President and General Manager, Consumer Products Group. 'Connectivity to the `Net is now placed front and center in the design of Compaq Presario Internet PCs. Our goal is to make getting started to surf the Web as easy as possible for our customers on their new Compaq home computers.'

Schrock noted that 'Compaq is offering consumers this service because we understand home computing and the Internet better than anyone else in the business.' He pointed to the growing 'web lifestyle' as a solid reason for Compaq to partner with GTE Internetworking as the Internet access provider, a key component in Compaq's initiative to become 'the Internet computing company of choice.' Research conducted by Compaq has shown that, in the past 18 months, the Internet has become the number one reason why people buy home computers and that 50 percent of home computers are already wired to the Internet.

'As one of the fastest-growing consumer and small-business Internet Service Providers in the world, we know what people are looking for in order to make the Internet work for them,' said Alex Coleman, vice president and general manager of GTE Internetworking. 'Compaq and GTE are jointly focused on giving consumers the easiest and most enjoyable computing and Internet experience possible.'

Secure and Easy Setup

As part of the out-of-box Compaq Presario registration process, consumers can sign up for the Compaq Easy Internet Access service powered by GTE quickly and securely. In addition, Compaq is working on future programs for the installed base of Presario owners to sign up for Compaq Easy Internet Access.

Competitively Priced

As part of the introductory registration process, Compaq is offering a $100 cash-back mail-in rebate on all new Presario desktop models to consumers who sign up for a 50-hour free trial. (1) Once those free hours expire, Compaq Easy Internet Access powered by GTE is $19.95 per month for full Internet access and one e-mail account. As part of being 'powered by GTE,' customers who sign up for GTE Long Distance phone service will get the same Internet service for $16.95 per month. (2) This service includes 2MB of Web space so consumers can set up their own home page.

Quality Service from Compaq and GTE

In addition to competitive pricing, GTE and Compaq provide the quality service consumers demand:

• local dial-up connections with speeds up to 56 Kilobits/sec from approximately 500 points of presence (POPs) for extensive coverage in North America;

• high-speed Internet access service to the home, as it becomes available in the customer's geographic area(3), at up to 1.5 Megabits/sec using new Universal Asymmetrical Digital Subscriber Line (UADSL) modem technology in 1999;

• and 24-hour, seven-day-a-week technical support.

  About Compaq Computer Corporation

  Founded in 1982, Compaq Computer Corporation, a Fortune 100 company, is a global information technology company. Compaq is the fifth-largest computer company in the world and the largest global supplier of personal computers. With worldwide sales of $24.6 billion in 1997, Compaq develops and markets hardware, software, solutions and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, networking products, commercial desktop and portable products and consumer PCs.

  Compaq North America is headquartered in Houston, Texas. Its products and services are sold and supported through a network of more than 25,000 commercial and consumer marketing partners across the United States and Canada.

  About GTE

  With 1997 revenues of more than $23 billion, GTE is one of the world's largest telecommunications companies and a leading provider of integrated telecommunications services. In the United States, GTE provides local service in 28 states and wireless service in 17 states; nationwide long-distance and internetworking services ranging from dial-up Internet access for residential and small-business consumers to Web-based applications for Fortune 500 companies; as well as video service in selected markets. Additional information about GTE can be found on the Internet at http://www.gte.com.

  About GTE Internetworking

  GTE Internetworking's consumer and small-business dial-up Internet access service is available nationwide, and dial-up analog access, up to 56kbps, is offered for $19.95 per month for flat-rated use, and includes two megabytes of drive space on a Web server for a personal home page and 24x7 technical support. Additionally, GTE Internetworking offers a wide range of flat-rate dial-up services and e-mailboxes from $24.95 per month premium service package with two e-mail boxes, enhanced Web site customization services and five megabytes of drive space, to a new LAN ISDN package for small businesses. GTE Internetworking has partnered with Encompass, Inc. to make access to its consumer and small business dial-up service quick and easy. Through Encompass' software the process of getting online is made dramatically simple. Additional information about GTE's Internet service and Encompass, Inc. can be found on the Internet at http://www.gte.net, or http://www.encmpss.com, respectively.

  (1) $100 Mail-in Rebate from Compaq with purchase of qualifying product and sign-up for 50-hour free trial of Compaq Easy Internet Access. Rebate offer is valid only in the USA and expires 12/31/98. 50 free hours of Internet access when Compaq Easy Internet Access is chosen from Compaq Internet Setup. The 50 free hours can be used over a 45-day period, up to two hours per day. A valid credit card will be required in order to continue service after the trial period. See store for details.

  (2) Monthly service charge for standard service is $19.95. GTE Long Distance customers are eligible for $16.95 monthly rate.

  (3) Service charges and availability for high-speed DSL services may vary.

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  Compaq and the names of Compaq products referenced herein are either trademarks and/or service marks or registered trademarks and/or service marks of Compaq.