Report No. CC 95-93ACTION IN DOCKET CASE                June 30, 1995
     
     FCC DENIES EMERGENCY MOTION FOR STAY AND JOINT PETITION
     FOR PARTIAL STAY OF   ADD-BACK ORDER 
                             (CC Docket No. 93-179)
     
              The FCC denied an emergency motion for stay of the effectiveness of the add-
     back requirements pending appeal of the Add-Back Order to the U.S. Court of
     Appeals for the District of Columbia Circuit filed by Ameritech Operating Companies
     (Ameritech) on April 28, 1995.  The FCC also denied a joint petition for a partial
     stay of the Add-Back Order and for imposition of an escrow or accounting mechanism
     pending appeal of the Add-Back Order to the Court of Appeals filed by Bell Atlantic
     and Southwestern Bell on May 9, 1995.
     
              On March 30, 1995, the FCC amended the price cap rules to include an
     express requirement that price cap LECs make an "add-back" adjustment when
     calculating earnings used to determine sharing and low-end adjustments for a year that
     follows a year in which a LEC incurred a sharing obligation or made a low-end
     adjustment.  An "add-back" adjustment eliminates the effects of sharing or low-end
     adjustments incurred on the LEC's current year's earnings.  
     
              In the Add-Back Order, the Commission found that the add-back adjustment is
     a necessary component of the sharing and low-end adjustment mechanisms, because it
     ensures that these mechanisms operate as one-time adjustments, as the Commission
     intended when it adopted the LEC price cap plan.  The Commission held that the
     explicit add-back rule would apply on a prospective basis and, therefore, would first
     be applied in the carriers' 1995 annual access tariff filings.  In determining the
     adjustments to their price cap indexes for the 1995-96 tariff year, LECs are required
     to compute their 1994 interstate earnings on the basis of the add-back rule. 
     
              Action by the Commission June 29, 1995 by Order (FCC 95-272).  Chairman
     Hundt, Commissioners Quello, Barrett, Ness and Chong.
     
                                    - FCC -
     
     News Media contact: Susan Lewis Sallett at (202) 418-1500.
     Common Carrier Bureau contacts: Joanne Wall at (202) 418-1550 and Geri Matise at
     (202) 418-1547.