CONTACT: Armando Rendón July 16, 1997 CPUC-081 415-703-1366 (A97-01-012)

CPUC APPROVES MCIC-BRITISH TELECOM MERGER

The California Public Utilities Commission (CPUC) today approved the merger of MCI Communications Corporation (MCIC) and British Telecommunications plc (BT as in the public interest under Public Utilities Code 854(a). MCIC operates five CPUC-licensed carriers in the state. BT, a foreign-owned international corporation, has no business activities in the state.

The Commission granted BT control of MCIC's five California carriers: MCI Telecommunications Corporation; MCI Metro Access Transmission Services, Inc.; Teleconnect Company, Teleconnect Long Distance Services and Systems, and Nationwide Cellular Services, Inc.

Commissioner Jessie J. Knight asserted, "The merger proposal will enhance MCIC's competitive position with BT's expertise and financial resources. This enhancement will likely increase competition in the local telecommunications market, which furthers the CPUC's policies to promote competition. In addition, the affiliation of MCIC's and BT's cellular and paging interests will improve services on a global scale, making California businesses better able to compete in international markets."

After the change of control is completed, BT will change its name as parent company to Concert plc and create a subsidiary called British Telecommunications plc which will conduct its United Kingdom telecommunications business. With the exchange of stock, MCIC will be merged into Tadworth, a wholly-owned subsidiary of BT, whose name will be changed to MCIC. MCIC officers and boards of directors of the five California subsidiaries will remain the same after the merger.

The CPUC approval was one of the last regulatory hurdles in the U.S.A for the merger to proceed. The Federal Communications Commission is expected to issue its decision on the merger in late summer.

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