NEWSReport No. CC 98-6    COMMON CARRIER ACTION               March 18, 1998

               COMMISSION RELEASES FEDERAL/STATE JOINT AUDIT 
                                REPORT OF GTE

       The Commission today released information obtained by FCC and state
regulatory commission auditors during a joint audit of the GTE Telephone Operating
Companies' property records.  The audit report concludes that certain GTE records
do not comply with the FCC rules either because the property described in the
records could not be physically located or the property was not described in enough
detail to permit verification of its existence.  The Commission found release of the
audit report to be in the public interest and also noted that the disclosure of the audit
report is a matter of mutual federal-state concern that could be the subject of other
investigations by the Commission or its state counterparts.

       Since 1990, the FCC has participated in audits with state commissions in
selected areas of mutual concern.  In 1995, the National Association of Regulatory
Utility Commissioners (NARUC) called for a federal-state joint audit of GTE.  The
FCC auditors subsequently joined with auditors from the Arkansas, Missouri,
Nebraska, Ohio, and Pennsylvania commissions to perform such an audit.  The
property records examined provide the supporting documentation for the investment
recorded in GTE's plant accounts, which are used by the FCC and the state
commissions in their decision-making.

       Auditors examined GTE's records in eight states -- Arkansas, California,
Hawaii, Missouri, Nebraska, Ohio, Pennsylvania, and Texas -- and focused on
records relating to GTE's three largest plant accounts.  After examining 2,286
records with a recorded value of $33 million, the auditors concluded that 693 of
these records, with a recorded value of $12 million, did not comply with the FCC
rules.  Specifically, assets with a value of $7 million, described in 347 records,
could not be found.  Assets with a value of $5 million, described in 346 records,
were not described in enough detail to permit verification of their existence.  Thus,
for all the items audited, 36% of the recorded value of GTE's plant was either
missing or could not be verified.

       The Commission voted to authorize release of the joint audit report.  After
reviewing the findings of the audit report, the Commission will determine what
actions, if any, are necessary to resolve these discrepancies.

       Action by the Commission, March 11, 1998, by Memorandum Opinion and
Order (FCC 98-34).  Chairman Kennard, Commissioners Ness, Furchtgott-Roth,
Powell, and Tristani, with Commissioner Furchtgott-Roth issuing a separate
statement.

                                     -FCC-

       News Media contact: Rochelle Cohen at (202) 418-0253.
       Common Carrier Bureau contact: Kenneth P. Moran at (202) 418-0800.