FOR IMMEDIATE RELEASE                                          AT
MONDAY, APRIL 3, 1995                              (202) 616-2771
                                               TDD (202) 514-1888

                                 
   AG UNVEILS PLAN TO ALLOW AMERITECH IN LONG DISTANCE MARKET

            LOCAL PHONE MARKETS TO BE OPENED AS WELL

          "AN HISTORIC DAY FOR THE AMERICAN CONSUMER"


         WASHINGTON, D.C. -- In a landmark move, Attorney General
Janet Reno announced today that the Department of Justice has
proposed to allow Ameritech Corp., a Regional Bell Operating
Company, to offer interexchange -- long distance -- phone
services on a trial basis.  Before Ameritech could do so,
competition would be introduced into the local telephone exchange
market.  The plane is supported by AT&T Corp., MFS, Inc., and the
Consumers' Union.  The proposal would be one of the most
significant modifications of the historical 1982 AT&T consent
decree, also known as the Modification of Final Judgment.  This
decree provided for the AT&T breakup and barred the so-called
Baby Bells from the long distance market. 

The proposed modification will be filed today with Judge Harold
Greene in the United States District Court in Washington, D.C. 
If approved by the Court, the modification would allow a trial,
supervised by the Department and the Court, in which Ameritech
could provide long-distance service for customers in Chicago,
Illinois and Grand Rapids, Michigan.  The trial could start once
local exchange competition develops in those areas.
         
         "Today is truly an historic day for the American consumer,"
Attorney General Janet Reno said.  "Our action will bring more
competition to the long distance market and help bring
competition to the local market for the first time ever. 
Competition means increased choices, decreased prices -- a double
victory for the American people."





                                 
         Assistant Attorney General Anne Bingaman added, "Over the
last decade, increases in long distance service competition and
telecommunications advances have been breathtaking.  The central
challenge has been to find a way to increase local telephone
competition as a foundation to the possible easing of the
Modified Final Judgment's restrictions.  Today's 
   proposal takes a giant step toward meeting that challenge."

         The Department of Justice proposal calls for a three-stage
process.  The proposed order would first have to be approved by
the Court, following a period of briefing by all interested
persons and hearings by the Court.  Prior to Ameritech's entry to
long distance service, the Department must determine that "actual
competition" and substantial opportunities for more competition
exist in local exchange services and that other conditions of the
order have been satisfied.  Finally, after Ameritech's entry, the
Department would retain a wide range of supervisory power,
including the authority to terminate the experiment at any time
if conditions warranted.  The District Court would also have the
discretion to take necessary actions at any point.
         
         "We can finally see the light at the end of the tunnel,"
Attorney General Reno added.  "A light that leads to more
competition, innovation and further growth in one of America's
most exciting, important and strategic industries."

         "This proposal is the result of thorough, tough negotiations
between the Department and Ameritech, immense efforts by state
regulators and others," Bingaman concluded.  "I believe we've
struck a good balance, one that protects the consumer and
promotes better  service in both local and long distance
markets."

         In early 1994, Ameritech submitted a plan to the Justice
Department asking for a waiver of the long distance
telecommunications prohibition under the Modification of Final
Judgment.  The Department solicited comments from a wide range of
interested parties and worked closely with state regulators.  The
proposed order has the support of the regulators, AT&T, a party
to the original decree; MFS Inc., a provider of alternative local
service; and the Consumers' Union. 

         Among the Justice Department's preconditions that Ameritech
must meet before entering the long distance market are:

         -- the unbundling of Ameritech's loops and ports as approved
by state regulators
         -- the necessary technical, operational and administrative
changes to implement local
           parity
         -- the resale of local service, interconnection, number
portability and 
           nondiscriminatory number assignment
         -- a compliance plan to meet the preconditions





                                 
         Upon Ameritech's entry, a series of safeguards would be
imposed by the Department proposal, including:

         -- Department of Justice authority to discontinue the trial
         -- Ameritech leasing, not owning, long distance transport
facilities
         -- Ameritech separating long distance operations into a
subsidiary

         The AT&T consent decree, as approved by Judge Greene,
oversaw the AT&T breakup and resulted in seven Regional Bell
Operating Companies.  In addition, it imposed line-of-business
restrictions on the Regional Bell Operating Companies.  Those
restrictions, as subsequently modified by the Court, prohibit the
Regional Bell Operating Companies from providing long distance
service and manufacturing telecommunications products.
         
         The separation of the Regional Bell Operating Companies'
local exchange monopolies from long distance services has
increased dramatically competition in the long distance market. 
As a result, consumer choice has increased as long distance rates
have decreased.

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