NEWSReport No. DC 96-40    ACTION IN DOCKET CASE                May 8, 1996
                                     
            FCC ADOPTS RULES FOR DISPUTE RESOLUTION PROCESS;
       Procedure Will be Used if Technical Disputes Arise Between 
  Non-Accredited Standards Development Organizations and Their Funders
                          (GC Docket No. 96-42)
                                    
                In order to implement a new statutory provision of the Telecommunications Act of 1996,
the Commission has adopted rules establishing a default dispute resolution process for when
technical disputes arise between a non-accredited standards development organization (NASDO)
and any party who funds the activities of the NASDO. Under the new rules, disputes will be
resolved by a recommendation of a three-person expert panel, selected by both the disputing party
and the NASDO, with the recommendation subject to disapproval by a vote of three-fourths of
the other funding parties. As intended by Congress, this procedure ensures that disputes can be
resolved in an open, non-discriminatory, and unbiased fashion within 30 days, and it will be used
only when all of the parties are unable to agree on a process for resolving their disputes. 

                The 1996 Act permits a Bell Operating Company, through a separate subsidiary, to engage
in the manufacture of telecommunications equipment and customer premises equipment after the
Commission authorizes the company to provide in-region, interLATA services. As one of the
safeguards for the manufacturing process, the Act sets forth procedures for a "non-accredited
standards development organization," such as Bellcore, to set industry standards for
manufacturing this equipment. The Act allows outside parties to fund and participate in setting
the organization's standards and requires the organization and funders to attempt to develop a
process for resolving any technical disputes. The Act requires the Commission to develop a
default dispute resolution process to be used if all the parties cannot agree to a process on their
own.

                The Commission originally proposed the use of binding arbitration as the dispute
resolution process.  The three-person expert panel process adopted by the Commission reflects
alternative proposals submitted by the industry.

                The Act also directs the Commission to establish penalties for delays caused by the
referral of frivolous disputes. Under the new rules, violations will be handled in accordance with
the Commission's forfeiture authority.
                
                Action by the Commission May 7, 1996, by Report and Order (FCC 96-205) Chairman
Hundt, Commissioners Quello, Ness, and Chong.

            - FCC -
                                    
                News Media contact: Rochelle Cohen at (202) 418-0500.
                Office of General Counsel contact: Sharon B. Kelley at (202) 418-1720.