July 28, 1997
                                                               
               STATEMENT OF FCC CHAIRMAN REED HUNDT 
                     ON PROPOSED BT/MCI MERGER 

     In view of the commitments for pro-competitive policies that MCI provided today, in
combination with other commitments previously made by BT, I personally believe we can and
should approve the BT/MCI merger as in the public interest.  

     Upon review of the record in this proceeding, Commission staff had particular concerns
about the lack of equal access in the United Kingdom, the availability of international
transmission capacity on the U.S.-U.K route, the relatively high cost of terminating U.S.
traffic in the United Kingdom, and the veto power held by the U.K. government over certain
BT management decisions due to a "special share" in BT held by the U.K. government.  The
commitments of today and of the past few months ameliorate these problems.  They include:

     *  MCI committed to support the equal access initiatives of the European Union.

     *  MCI acknowledges that the FCC could take enforcement action against MCI licenses
if BT fails to comply with implemented European Union equal access legislation.  More
broadly, it marks an important principle for the future -- that a U.S. licensed carrier cannot
unfairly benefit if its foreign partner fails to implement equal access obligations, which
ultimately hinders competition in the U.S. market.

     * BT and MCI committed to making substantial capacity on the TAT 12/13 transatlantic
submarine cable available to newly licensed competitors.  MCI has agreed to provide these
new competitors with adequate matching backhaul capacity in the United States.

     *  BT reduced the U.S.-U.K. settlement rate from 11 to 7 cents per minute, one of the
lowest rates in the world.
     
     *  The U.K. Government recently agreed to sever all ownership ties with BT, providing
additional assurance that BT will not enjoy any special advantage over other U.K. carriers.

     BT's and MCI's commitments, and the opportunities that exist for their competitors in
the United States and the United Kingdom, will safeguard the interests of American consumers
in the context of this merger.  Under these conditions, I personally endorse swift approval of
the merger.
                               - FCC -