NEWSReport No. CC 96-20               COMMON CARRIER ACTION              December 10, 1996

    COMMISSION OVERTURNS CONNECTICUT DECISION AND REMOVES BARRIERS TO
            ENTRY FOR NEW PAYPHONE PROVIDERS IN CONNECTICUT;
Commission Grants Petition for Preemption filed by New England Public Communications
                                 Council
 
     In the Commission's second exercise of its preemption authority under section 253 of the
Communications Act, the Commission today overturned a decision by the Connecticut Department of
Public Utilities Commission (CDPUC) that prohibited independent payphone providers and non-local
exchange carriers (LECs) from offering payphone service in the state of Connecticut.  The
Commission's decision granted the Petition for Preemption filed by the New England Public
Communications Council (NEPCC) and concluded that Connecticut's decision to prohibit independent
payphone providers and non-LECs from providing payphone service in Connecticut is inconsistent
with the pro-competitive policies of the Telecommunications Act of 1996.

     The Commission's decision to preempt the CDPUC's decision was based on two grounds. 
First, the Commission concluded that, as asserted by the NEPCC, the CDPUC's decision violates
section 253 of the Act.  Section 253 of the Act generally bars state and local governments from
imposing legal requirements that may prohibit or have the effect of prohibiting the ability of any
entity to provide any interstate or intrastate telecommunication services -- including payphone
services.  Because the Connecticut decision prohibits a certain class of service providers, that is
independent payphone service providers, from entering the payphone market, the Commission
determined that the state's decision violates section 253 of the Act.

     Second, on independent grounds, the Commission concluded that Connecticut's decision is
preempted by section 276 of the Act and is inconsistent with the Commission's recent order on
payphone service.  In its recent payphone order, the Commission determined that each state should
review and remove any regulations that impose entry or exit requirements with respect to payphone
services.  In the decision released today, the Commission determined that the CDPUC's decision
imposes just the kinds of barriers to entry in the payphone market that the 1996 Act sought to
remove.  Consequently, the Commission concluded that Connecticut's decision is preempted under
section 276 of the Act.

     Action by the Commission December 6, 1996, by Memorandum Opinion and Order (FCC 96-
470).  Chairman Hundt, Commissioners Quello, Ness, and Chong.

                                  - FCC -

News Media contact:  Mindy J. Ginsburg (202) 418-1500.
Common Carrier Bureau contact:  Staci Pies (202) 418-1580.