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             California Public Utilities Commission
505 Van Ness Avenue, Room 5301          San Francisco, CA 94102
CONTACT: Armando Rendon          April 5, 1995         (CPUC-026
         415-703-1366                                (I88-11-040)

       CPUC APPROVES TYING PHONE SALES TO CELLULAR SERVICE

     The California Public Utilities Commission (CPUC) today
approved "bundling" or tying cellular phone sales with specific
cellular providers, reversing its long-standing ban against
tie-in sales in the cellular retail market.
     The Commission stressed that the policy change should
stimulate competition and reduce the cost of cellular service
while ensuring service quality and customer choice.
     However, cellular wholesalers, resellers, and retail stores
who wish to bundle discounted equipment with specific services
must still meet three conditions:
     o The customer must be offered the option of voluntarily
       accepting the bundled equipment or of buying only the
       cellular service;
     o The cellular service can be offered only if it is
       tariffed, that is, sold at rates or prices on file with
       the CPUC; bundled equipment would have no such
       restrictions; and,
     o Retail stores must abide by California and federal
       consumer protection and below-cost pricing laws.
     Previously, the CPUC prohibited cellular phone stores from
selling equipment at a discount only if the customer subscribed
to a particular cellular service company.  The Commission
concluded in prior cases that giving a customer a special rate on
a product such as a phone only if they bought a tariffed product,
such as installation of phone service, added up to an indirect
discount on the tariffed product.
     Today's decision explains that bundling cellular service and
equipment is legal as long as the utility adheres to the tariffed
                             -more-
rates and charges so that they do not change the price of the
tariffed product either directly or indirectly.  Since today's
decision grants cellular carriers the ability to offer bundled
service and equipment, it also allows bundling by retailers as
long as they do not directly or indirectly deviate from the
prices of cellular service set by tariff.
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