Report No. CC 97-49          COMMON CARRIER ACTION           September 26, 1997

               FCC Denies MCI's Request for Preemption of the 
       Missouri Commission's Jurisdiction Over Arbitration Proceeding 
                                       
       The FCC has denied a petition filed by MCI for preemption of the jurisdiction
of the Missouri Public Service Commission (Missouri Commission) with respect to
an arbitration proceeding involving MCI and Southwestern Bell Telephone Company
(SWBT).  The FCC denied the petition because it found that MCI did not prove, as
FCC rules require, that the Missouri Commission "failed to act" to carry out its
responsibility in arbitrating an interconnection agreement under section 252 of the
Communications Act, as amended by the Telecommunications Act of 1996 (the Act).

       MCI sought preemption of the Missouri Commission pursuant to section
252(e)(5) of the Act.  Section 252(e)(5) authorizes the FCC to preempt a state
commission in any proceeding or matter in which the state commission "fails to act
to carry out its responsibility" under section 252.  Section 252 sets out the procedures
by which telecommunications carriers may request and obtain interconnection,
unbundled network elements, or resale from an incumbent local exchange carrier
either through voluntary negotiations or through mediation or arbitration by state
commissions.
       
       In its preemption petition, MCI claims that the Missouri Commission failed to
address all the relevant issues in the arbitration proceeding between MCI and SWBT
within the nine month time frame that the Act specifies.  In a Memorandum Opinion
and Order released today, however, the FCC noted that the language of the Act
indicates that a state commission may not be found to have "failed to act" within the
meaning of section 252(e)(5) solely on the basis that the state commission did not
arbitrate issues that were never clearly and specifically presented to it. The FCC
found in this case that MCI failed to identify clearly or specifically the issues that it
claimed were not addressed by the Missouri Commission, in accordance with the
Missouri Commission's arbitration procedures. Based on these facts, the FCC
concluded that the Missouri Commission resolved in a timely manner all of the
issues that were clearly and specifically presented to it.
       
       The Commission also emphasized that carriers have an ongoing duty to
negotiate the terms and conditions of interconnection in good faith.  The FCC said it
strongly encourages state commissions, in addition to satisfying their mediation and
arbitration responsibilities under section 252, to enforce vigorously all carriers' duty
to negotiate in good faith.  Only by fulfilling both of these responsibilities will state
commissions provide new entrants with the best opportunity to reach complete and
workable interconnection agreements with incumbent carriers.
 
       Action by the Commission September 26, 1997, by Memorandum Opinion
and Order (FCC 97-345).  Chairman Hundt, Commissioners Quello, Ness, and
Chong.

    -FCC-
                                      
       News media contact:  Rochelle Cohen at (202) 418-0253.
       Common Carrier Bureau contact:  Lisa Sockett or Kyle Dixon at 
               (202) 418-1580.