Internet America Stimulus Grant Proposal Supported by the State of Texas

--Among its evaluation criteria the State considered reasonableness of the proposed cost of service, sustainability and the level of service to be provided

The Texas Department of Agriculture Commissioner Todd Staples has recommended the grant application submitted by Internet America, Inc. to the National Telecommunications and Information Administration under Broadband Technology Opportunities Program. Internet America's application is among only 21 endorsed "last mile" projects, defined as those which deliver high speed broadband Internet directly to consumers. The NTIA sought input from Texas on those applications affecting the state. According to its announcement, the State of Texas screened projects for the ability to extend broadband service to unserved and underserved populations; reasonableness of the proposed cost of service; sustainability; the level of service to be provided; and the ability to address the policy goals of the State of Texas, BTOP and the American Recovery and Reinvestment Act.

William "Billy" E. Ladin, Chairman and Chief Executive Officer, said, "We have years of experience building and maintaining infrastructure and providing high quality Internet to homes in rural areas. Our proposed project reflects our commitment to further the vision of the Recovery Act by expanding the reach and quality of broadband services, while also creating jobs and stimulating the economy. We believe our project is shovel-ready mainly because we have an experienced management team in place, our systems are proven and scalable and we have received vendor commitments of support for key supplies and services. As the second largest U.S. state in both population and landmass, Texas will need substantial support from the NTIA to expand broadband services. The support of our project by the State of Texas is appreciated and we hope to play a key role in meeting these needs within our vast state."

Texas' recommendations demonstrate the state's priorities in strategically deploying broadband to all Texans. The NTIA is responsible for reviewing applications for financial, technical and administrative viability and sustainability. The assistant secretary of NTIA will determine the final grant awards.

About Internet America

Internet America is a leading Internet service provider serving the Texas market. Based in Houston, Internet America offers businesses and individuals a wide array of Internet services including broadband Internet delivered wirelessly and over DSL, dedicated high-speed access, web hosting, and dial-up Internet access. Internet America provides customers a wide range of related value-added services, including Fax2email, online backup and storage solutions, parental control software, and global roaming solutions. Internet America focuses on the speed and quality of its Internet services and its commitment to providing excellent customer care. Additional information on Internet America is available on the Company's web site at http://www.internetamerica.com.

This press release may contain forward-looking statements relating to future business expectations. These statements, specifically including management's beliefs, expectations and goals, are subject to many uncertainties that exist in Internet America's operations and business environment. Business plans may change, and actual results may differ materially and without limitation as a result of a number of risk factors. A more detailed list of cautionary statements is included in our other publicly filed reports and documents.

SOURCE: Internet America, Inc.

Internet America, Inc. 
Jennifer S. LeBlanc, 713-968-2500 
investor.relations@airmail.net