NEWSReport No. DC-2688     ACTION IN DOCKET CASE          December 12, 1994

                        COMMON CARRIER BUREAU FINDS
              VIRTUAL COLLOCATION TARIFF PROVISIONS UNLAWFUL
                    AND LIKELY TO BE UNREASONABLY HIGH
                             (CC DOCKET 94-97)

     On December 9, 1994, the Common Carrier Bureau partially suspended most of the rates
for virtual collocation service that Tier 1 local exchange carriers had filed pursuant to the
Commission's July 1994 Virtual Collocation Order.  The Bureau also suspended all of the
carriers' virtual collocation tariffs for one day and permitted them to take effect, subject to an
investigation and an accounting order.  In addition, the Bureau rejected several terms and
conditions proposed in the LECs' tariffs that were found to be "patently unlawful."  

     "This action represents another significant step in the Commission's continuing effort to
foster fair and efficient competition for interstate access services," said Common Carrier Bureau
Chief Kathleen M.H. Wallman.  "The measures implemented in our order are intended to ensure
that during the pendency of the tariff investigation, expanded interconnection through virtual
collocation will be available under rates, terms and conditions that will promote competition for
interstate transport services." 

     The local exchange carriers filed their tariffs for virtual collocation service on September
1, 1994 with a scheduled effective date of December 15, 1994.  Based on its initial review of
those tariffs, the Bureau concluded that most of the carriers had failed to show that their
proposed overhead loading factors were reasonable under the standard set forth in the Virtual
Collocation Order.  Specifically, the Bureau found that carriers had failed to justify proposals
to recover a greater proportion of overhead costs in charges for virtual collocation services than
they recover in charges for comparable services.  The Bureau concluded that the proposed rates
that included the higher overheads were likely to be unreasonably high and, accordingly,
partially suspended the affected rates.  Ms. Wallman stated that the Bureau's action "will prevent
apparently unreasonable rates from taking effect, while permitting rates that do not appear to be
unreasonable to become effective, subject to an investigation and an accounting order."

     Action by the Chief, Common Carrier Bureau, December 9, 1994, by Order (DA 94-
1421).

                                  - FCC -

     News Media Contact: Susan Lewis Sallet at (202) 418-0500.
     Common Carrier Bureau Contacts: Donna N. Lampert at (202) 418-1580 
and Amy Glatter at (202) 418-1530.