Report No. DC 96-01        ACTION IN DOCKET CASE           January 22, 1996


            COMMISSION APPROVES SETTLEMENT AGREEMENT CONCERNING
         LA STAR CELLULAR TELEPHONE COMPANY; DENIES CONSENT DECREE
                          (CC DOCKET NO. 90-257)

     The Commission has conditionally approved a settlement
agreement under which La Star Cellular Telephone Company has
agreed to withdraw its application for authority to construct and
operate a cellular telephone system on the wireline block in the
New Orleans, Louisiana Metropolitan Statistical Area (MSA).  

     Following remand from the United States Court of Appeals for
the District of Columbia Circuit, the Commission reaffirmed the
dismissal of La Star's application as unacceptable for filing. 
The Commission found that La Star was ineligible to file for
frequency Block B because it is not controlled by a wireline
carrier with a presence in the cellular market as required by the
rules.

     La Star is a joint venture owned 51 percent by SJI Cellular,
Inc., and 49 percent by Star Cellular Telephone Co.  SJI's parent
company, SJI, Inc., also owns a telephone company serving a
portion of the New Orleans MSA.  On the other hand, neither
Star's parent company, United States Cellular Company (USCC), nor
USCC's parent, Telephone and Data Systems, Inc. (TDS), is
eligible to apply in New Orleans.  The Commission found that
USCC, not SJI, controlled La Star, making La Star ineligible.  La
Star and TDS/USCC sought reconsideration of the Commission's
decision on remand.

     The parties submitted a settlement agreement under which La
Star would withdraw its application and SJI would receive
$200,000 in partial reimbursement for its litigation expenses in
prosecuting the La Star application.  The settlement is
contingent on Commission approval of a consent decree dealing
with allegations that SJI made misrepresentations or lacked
candor in connection with the La Star application.

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     While SJI admitted no misrepresentation or lack of candor,
it acknowledged that its actions evidence a lack of care that
resulted in a failure to present information and explanations 
completely and comprehensively in its representations to the
Commission.  SJI further acknowledged the need to carefully
scrutinize representations to the FCC.  SJI agreed to make a
voluntary payment to the United States Treasury of $80,000.

     The Commission approved the settlement agreement but denied
the proposed consent decree since, under its rules, a consent
decree in the hearing context cannot be used to resolve basic
qualifying issues, such as misrepresentation.  Therefore, the
Commission approved the settlement agreement conditioned upon the
deletion of provisions making the agreement contingent on
approval of the consent decree.  It noted, however, that, even in
the absence of a consent decree, there is no reason to take any
further action regarding the allegations against SJI. 

     Action by the Commission January 16, 1996, by Memorandum
Opinion and Order (FCC 96-3).  Chairman Hundt, Commissioners
Quello, Barrett, Ness, and Chong.

                                   -FCC-

     News Media contact: Patricia A. Chew at (202) 418-0500.