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                       California Public Utilities Commission
          505 Van Ness Avenue, Room 5301          San Francisco, CA 94102
                                                                         
                               '
          CONTACT: Armando Rendon              December 21, 1994  CPUC-095
                   415-703-2423                                (I87-11-033)

                           CPUC ORDERS SETTLEMENT TALKS ON
                           LOCAL PHONE MARKET COMPETITION

              The California Public Utilities Commission (CPUC) today

          challenged all facets of the telecommunications industry to

          negotiate a settlement of issues related to opening local phone

          markets--including local service--to competition by 1997.

              Starting January 1, parties will have 90 days to work out a

          settlement on implementation issues and must issue a progress

          report by March 31.

              In the meantime, proposals for interim rules for local

          competition may be filed up to January 31 with the Chief,

          Telecommunications Branch, Commission Advisory and Compliance

          Division.  The Commission will issue a proposal for comment in

          April, unless a settlement is reached.   The Commission intends

          to adopt interim rules in June 1995 allowing competitors to seek

          CPUC authority to offer local service soon thereafter.

              The Commission shortly will issue several orders under the

          ongoing Open Access and Network Architecture Development (OANAD)

          proceeding that are key steps toward freeing local phone markets

          to competition.  The first of two orders would address

          restructuring the way calls are transmitted, the second

          defining the monopoly elements that make up the phone network in

          order to  break out, or "unbundle," specific costs.  This would

          allow competition in providing these unbundled services.

              An order to review the present and future status of

          universal service will be issued in January, calling for both

          public participation and full panel hearings.  The CPUC will

          submit a report to the State Legislature by January 1, 1996.

              In case negotiations fail or some issues remain unresolved,

          CPUC staff will be working on a parallel track in three broad

          areas: technical issues including OANAD, local competition, and

          consumer protections and regulatory streamlining.      ###