NEWSReport No. DC 96-91    ACTION IN DOCKET CASE         September 27, 1996
                                     
         FCC RECONSIDERS TWO ISSUES IN ITS INTERCONNECTION RULES
              (CC  Docket No. 96-98; CC Docket No. 95-185)
                                    
       The Commission today, on its own motion, released a decision that reconsiders two
issues addressed by its August 8, 1996 Order implementing the local competition provisions
of the Telecommunications Act of 1996.  

       First, the Commission established a flat-rated default proxy range for the non-traffic
sensitive costs of basic residential and business line ports associated with the unbundled local
switching element.  The Commission adopted an interim default price range of $1.10 to $2.00
per line port for ports used in the delivery of basic residential and business exchange services. 
This default price range is derived from existing state commission decisions based, at least in
part, on forward-looking costs.  The default proxy range for local switching adopted in the
Commission's August decision will continue to apply to the traffic-sensitive components of
the local switching element, including the switching matrix, the functionalities used to provide
vertical features, and the trunk port.

       Second, the Commission clarified that, because its local competition Order concluded
that the local switching element includes dedicated facilities, a requesting carrier is effectively
precluded from using unbundled switching to substitute for switched access services where
the loop is used to provide both exchange access to the requesting carrier and local service by
the incumbent local exchange carrier (LEC).  The Commission stated it was making clear
that, as a practical matter, a carrier that purchases an unbundled switching element will not be
able to provide solely interexchange service or solely access service to an interexchange
carrier, and a requesting carrier that purchases an unbundled local switching element for an
end user may not use that switching element to provide interexchange service to end users for
whom that requesting carrier does not also provide local exchange service.

       Action by the Commission September 27, 1996, by First Order on Reconsideration
(FCC 96-394).  Chairman Hundt, Commissioners Quello, Ness, and Chong.

                                  - FCC -

       News Media contact: Mindy J. Ginsburg at (202) 418-1500.
       Common Carrier Bureau contacts: Steve Weingarten at (202) 418-1520 and Lisa Gelb at
(202) 418-1580.