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             California Public Utilities Commission
505 Van Ness Avenue, Room 5301            San Francisco, CA 94102
CONTACT: Armando Rendon           April 1, 1996          CPUC-029
         415-703-1366

          CPUC WILL REVIEW PROPOSED PACTEL, SBC MERGER

     The members of the California Public Utilities Commission
(CPUC), upon being informed of the proposed merger of Pacific
Telesis (PacTel) into Southwestern Bell Corporation (SBC), today
stated that they will perform the review and make the
determinations required by California state law.
     The CPUC has the responsibility for reviewing and deciding
whether to approve mergers of California telephone, electric, and
gas utilities with more than $500 million in annual revenues.  To
approve a merger, the CPUC must find among other things that the
merger provides short- and long-term econonic benefits to
customers and does not adversely affect competition.
     Also, the law requires that the merger be fair and
reasonable to all affected public utility employees and to the
majority of all affected utility shareholders.
     If the economic benefits are met, the CPUC must equitably
allocate the benefits between customers and shareholders.
Ratepayers are guaranteed by law to receive no less than 50
percent of the benefits identified.
     Further, the CPUC must request an advisory opinion from the
state Attorney General on whether competition will be adversely
affected and which identifies mitigation measures to avoid
anticompetitive results.
     The applicable California state law outlines eight specific
criteria the CPUC must consider in finding whether the merger is
in the public interest.  These include whether the merger will:
     --maintain or improve the quality of service to public
          utility customers;
     --be beneficial to state and local economies overall and to
          the communities in the areas served by the utility;
     --maintain or improve the financial condition of the
          resulting public utility;
     --maintain and improve the quality of management of the
          resulting public utility;
                             -more-
     --preserve the jurisdiction of the CPUC and its capacity to
          effectively regulate and audit utility operations in
          the state; and,
     --provide mitigation measures to prevent significant adverse
          consequences.
     Under statute, SBC has the burden of proving by a
preponderance of the evidence that the requirements listed above
are met.  As a first step, the CPUC will establish a schedule to
discharge its responsibilities under the state Public Utilities
Code.  The merger must also be reviewed by the Federal
Communications Commission and the U.S. Department of Justice.
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