NEWSReport No. DC 96-49                 ACTION IN DOCKET CASE  June 6, 1996
                                     
                    FCC PROPOSES RULES TO IMPLEMENT 
                 PAYPHONE PROVISIONS OF THE TELECOM ACT
                         (CC Docket No. 96-128)

       The Commission  has begun a proceeding to implement Congress' objectives as set
forth in Section 276 of the the Telecommunications Act of 1996.  Consistent with the 1996
Act, the Commission seeks to ensure that all payphone service providers (PSPs), whether local
exchange carriers (LECs) or competitive providers, are compensated for each call originated
by their payphones and to discontinue subsidies for payphones owned by LECs.  The
proposed rules would benefit PSPs by promoting regulatory parity and consumers by
encouraging both competition among PSPs and the widespread deployment of payphones,
including "public interest payphones" in areas unserved by the market.

       In issuing the Notice of Proposed Rulemaking (NPRM) released today, the
Commission seeks comment on proposals that would:  provide compensation for every
completed intrastate and interstate call using a payphone; end subsidies for LEC payphones;
permit Bell Operating Companies (BOCs) to negotiate with the payphone location owner
about a payphones's presubscribed long distance carrier, provided that the Commission finds
that such negotiations are in the public interest; and establish a class of public interest
payphones to be located where there would not otherwise be a payphone.

       In the NPRM, the Commission has sought comment on:

       o  Establishing a per-call compensation plan for all access code calls, subscriber 800
and other toll-free number calls, and debit card calls, whether intrastate, interstate, or
international, as well as local coin calls;

       o  Treating incumbent LEC payphones as detariffed customer premises equipment and
require incumbent LECs to offer individual central office coin transmission services to all
PSPs under a nondiscriminatory, tariffed offering;

       o  Whether it is in the public interest for the BOCs to negotiate with location providers
on the selection of a presubscribed interLATA carrier; and

       o  Permitting all PSPs to negotiate with location providers on the selection of a
presubscribed intraLATA carrier.

                                  (over)

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       o  Whether "public interest payphones" should be maintained and, if so, how they
should be funded.
       
       Action by the Commission June 4, 1996,  by Notice of Proposed Rule Making (FCC
96-254).  Chairman Hundt, Commissioners Quello, Ness, and Chong, with Chairman Hundt
issuing a separate statement.

                                  - FCC -

       News Media contact: Mindy J. Ginsburg at (202) 418-1500.
       Common Carrier Bureau contact: Michael Carowitz at (202) 418-0982.