September 30, 1996
                                    
                                    
                  Commissioner Ness Addresses U S West 
                 Regional Oversight Committee; Heralds 
          "New Partnership" Between State and Federal Agencies


FCC Commissioner Susan Ness attended meetings of the U S West Regional Oversight
Committee in Saint Paul, Minnesota on September 29-30.  In a luncheon address to members
and staff of the 14 state public utility commissions served by U S West, she discussed the
emerging partnership between federal and state regulatory authorities.

She expressed her belief that federal and state regulators share a commitment to competition. 
She described the Commission's August 8 interconnection ruling as establishing "strong
national rules," but "relying heavily on the states . . . to shoulder many tasks of
implementation."  "Congress wanted our regulations to ensure that competition occurs in all
50 states, but with minimal disruption of the procompetitive progress already underway in
some states."  She also noted that state regulators have a responsibility to tailor their
implementation of the interconnection rules to the characteristics and needs of their own
states.

Commissioner Ness offered several preliminary observations on the universal service issues
pending before the federal-state Joint Board.  Among them:

þ    "It is vital that the rules we develop send correct economic signals . . . .  The
     universal service regime should reward efficiency, not inefficiency." 

þ    "The Telecommunications Act of 1996 was intended to bring about prices for
     telecommunications services that are lower, not higher.  Raising the residential SLC is
     not on my 'to do' list."

þ    "The value of connecting school classrooms and libraries is great; our society cannot
     rely entirely on ad hoc, voluntary efforts to get the job done."  

þ    "Reforming universal service is an evolutionary process.  The state role in the Joint
     Board does not end on November 8 but continues up until the day of final decision."  

Commissioner Ness urged that regulators look beyond traditional jurisdictional divisions: 
"The issue is not whether the statute assigns a particular responsibility to the FCC, states, or
joint board.  The question is whether we both have relevant concerns and expertise . . . .  [A]t
the end of the day, we are not going to be judged on the basis of whether certain subjects
were within the federal or the state jurisdiction but on whether competition developed or not,
whether prices are lower or higher, whether new services are available, whether consumers
enjoy choices.  We sink or swim together."