Report No. CC-570        COMMON CARRIER ACTION      April 8, 1994

                    GTOCs AND FCC SIGN CONSENT DECREE; 
               GTOCs TO CONTRIBUTE $350,000 TO U.S. TREASURY

     The Commission and GTE Telephone Operating Companies (GTOCs)
have signed a Consent Decree which terminates an FCC audit of
business transactions that occurred among the GTOCs and two of
their nonregulated affiliates, GTE Supply (GTES) and GTE Data
Services, Inc. (GTEDS), between 1988 and 1990. 

     The audit alleged that GTES and GTEDS achieved, through
sales
of services to the GTOCs, rates of return substantially in excess
of the Commission-prescribed authorized rate of return for the
interstate access services of the GTOCs in every year examined. 
It
further alleged that the GTOCs apparently recorded the full
charges
for these services provided by GTES and GTEDS as regulated costs,
and that the GTOCs apparently passed these costs on to
ratepayers.
The GTOCs denied both allegations.

     The GTOCs involved are GTE California, GTE Florida, GTE
Hawaiian Telephone, GTE North, GTE Northwest, GTE South and GTE
Southwest.

     Under the terms of the consent decree, the GTOCs will file a
tariff, effective April 15, 1994, lowering their carrier common
line rate by $49.5 million on an annualized basis, from the rate
in
effect July 1, 1993; and the GTOCs will make a permanent downward
adjustment of $14 million to their price cap index for the common
line basket, effective April 15, 1994.  These actions will reduce
the amounts the GTOCs charge long distance companies, such as
AT&T,
for providing the GTOCs' customers with access to long distance
facilities.  Consumers will benefit as long distance companies
pass
these reduced charges through in lower rates for interstate
services.

     The consent decree also provides that the GTOCs will make a
voluntary contribution to the U.S. Treasury of $350,000.

     The Commission also decided to release the staff's summary
of
the audit findings.



                                  (over)


                                    -2-

     Actions by the Commission January 28, 1994, by Consent
Decree
and Consent Decree Order, and Memorandum Opinion and Order (FCC
94-
15, 94-16).  Chairman Hundt, Commissioners Quello, Barrett and
Duggan.

                                   - FCC -

     News Media contact: Rosemary Kimball at (202) 632-5050.
     Common Carrier Bureau contact: William Kehoe or Thomas Beers
at (202) 632-7500.