NEWSReport No. DC-95-32    ACTION IN DOCKET CASE          February 17, 1995


                FCC GENERALLY AFFIRMS  INTEREXCHANGE ORDER
                          (CC DOCKET NO. 90-132)

     The FCC has affirmed, with certain minor modifications, the Interexchange Order, which
examined the state of competition in the interstate interexchange marketplace, and streamlined
the Commission's regulatory policies to reflect this competition.

     In the Interexchange Order, the Commission found that most business services were
subject to substantial competition.  Based on this conclusion, the Commission further streamlined
its regulation of most of AT&T's business services, while retaining price cap regulation for two
services that were found to be less competitive -- 800 services and analog private line services. 
The Commission subsequently further streamlined its regulation of AT&T's 800 services,
following the implementation of a number portability system that eliminated the principal barrier
to competition in 800 services.  The Commission also authorized all interexchange carriers
(IXCs)  to offer service pursuant to individually-negotiated contract rates that were generally
available to similarly situated customers.  In addition, the Commission eliminated
nondiscrimination reporting requirements for AT&T services subject to further streamlining, and
the requirement that AT&T submit annually an independent audit report on its installation and
maintenance procedures.  Finally, the Commission eliminated the comparably efficient
interconnection (CEI) filing requirements and CEI parameters for AT&T's provision of enhanced
services that relied exclusively on basic services subject to further streamlining.

     Eleven parties filed petitions for reconsideration of the Interexchange Order.  They were:
AT&T, Ad Hoc Telecommunications Users Committee, Aeronautical Radio, Inc., Alascom,
Inc., Broadcast Coalition, Citicorp, The Competitive Telecommunications Association,
Independent Data Communications Manufacturers Association, Inc., MCI, US Sprint, and
Williams Telecommunications Group, Inc.  Reconsideration requests relating to the bundling of
800 services and inbound services with other services were addressed in previous orders.

     The Commission generally affirmed the substantive decisions of the Interexchange Order. 
Minor modifications were made on reconsideration in certain areas.  First, the Commission
clarified the application of the substantial cause test to contract-based tariffs.  

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     Under this test, dominant carriers must show substantial cause for revisions to tariffs
that alter material terms and conditions of a long term contract.   
    
     Second, the Commission held that comparably efficient interconnection requirements
would not apply to any streamlined service, regardless of whether they are coupled with
nonstreamlined services in the provision of an enhanced service.  For any enhanced service
AT&T proposes to provide that relies on both streamlined and nonstreamlined services,
AT&T is required to file a CEI plan describing how it is complying with the CEI parameters
for the nonstreamlined services only.

     Finally, the Commission removed from Basket 3, analog private line services
provided under contract to government entities.  The Commission found that these services
do not need to be subject to price cap regulation since the potential customers are large,
sophisticated users with substantial bargaining power.  Removing these services limits
AT&T's ability to subsidize rate decreases for these users with rate increases in other analog
private line elements.  In light of this change, the Commission recalibrated the price cap
index and actual price index for Basket 3.

     Action by the Commission January 3, 1995, by Memorandum Opinion and Order on
Reconsideration (FCC 95-2).  Chairman Hundt, Commissioners Quello, Barrett, Ness, and
Chong.

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     News Media contact:  Susan Lewis Sallet at (202) 418-1500 or Patricia A. Chew at
(202) 418-0500.
     Common Carrier Bureau contact: Kevin Werbach at (202) 418-1597.