FOR IMMEDIATE RELEASE                                          AT
WEDNESDAY, JUNE 25, 1997                           (202) 616-2771
                                               TDD (202) 514-1888


  JUSTICE DEPARTMENT RECOMMENDS TO FCC THAT IT DENY AMERITECH'S
          APPLICATION TO PROVIDE LONG DISTANCE IN MICHIGAN


   Ameritech has made Important Progress Towards Opening Local
    Phone Markets in Michigan--But Not Enough to Satisfy the
              Law's Requirements, Justice Says


     WASHINGTON, D.C. -- The Department of Justice today
recommended that the Federal Communications Commission deny an
application by Ameritech to provide long distance service in
Michigan, because Ameritech has not fully completed the legally
required steps to open local telephone markets there to
competition.  In comments filed with the FCC, the Department did,
however, note that Ameritech has made significant progress
towards opening local telephone markets in Michigan.

     "As a result of Ameritech's efforts and cooperation with the
Department, as well as the State of Michigan's leadership in
removing legal and economic barriers to entry, local competition
is beginning to take root in Michigan," said Joel I. Klein,
Acting Assistant Attorney General for the Department's Antitrust
Division.  "Though it has met several of the necessary conditions
for entry, Ameritech has yet to meet all the law's requirements,
including the items set out by Congress in the competitive
checklist.  Nor has Ameritech demonstrated that its markets are
fully and irreversibly open to competition."

     Following the break up of the integrated Bell system as part
of the AT&T divestiture, the independent Bell Operating
Companies, or BOCs, were barred from providing long distance
services in their respective region as part of the Modified Final
Judgment, or MFJ, in the AT&T case.

     In 1995, the Department, Ameritech, AT&T, and other parties
proposed a waiver of the MFJ, on a trial basis, to allow
Ameritech to enter the in-region, long distance market once it
had instituted a series of market opening measures and
demonstrated that actual competitive opportunities were
expanding.  Though it never went into effect, this trial, called
the "Customers First" plan, was an important step in the
continuing, collective efforts of Ameritech, the Department, and
the State of Michigan to open local markets in the state to
competition as a means to lower prices, enhance service offerings
and improve service for telephone customers. 

     As today's filing explains, implementing the complex
processes that will be needed to facilitate local competition
will take time and considerable effort.  Though the progress
towards opening the Michigan local market to competition has been
substantial, Ameritech has yet to make the necessary
demonstration to warrant in-region, long distance entry. 

     Under the Telecom Act, the BOCs are presently barred from
offering in-region long distance service.  Specifically, Section
271 of the Act prohibits a BOC, such as Ameritech, from providing
in-region long distance services until it demonstrates to the FCC
that it has met a variety of legal requirements designed to open
the local telephone markets in a particular state to competition.

     In considering whether to approve a BOC's application for
long distance authority in a particular state, the FCC must
consult with the Justice Department and give "substantial weight"
to its assessment as to whether the BOC should be allowed to
provide in-region long distance service.

     In its evaluation of Ameritech's application, the Department
concluded that Ameritech:

          Was not providing two "competitive checklist" items--
          unbundled switching, which allows competitors to direct
          the routing of calls and local transport, the system
          that actually carries local calls--in the manner
          required by orders of the FCC and the Michigan Public
          Service Commission.  

          Had not shown that it had adequate systems for
          providing resale services and unbundled elements to its
          competitors, as required by the Telecom Act.

          Had not shown that it had fully resolved certain
          interconnection problems, which caused calls between an
          Ameritech customer and a competitor's customer to be
          blocked more frequently than were calls from one
          Ameritech customer to another Ameritech customer.

          Needed to improve the measurement of its performance in
          providing resale services and unbundled elements to its
          competitors, so that parity and nondiscrimination can
          be assured.

     Ameritech filed its application with the FCC on May 21,
1997.  Under the Telecom Act, the FCC must approve or deny the
application by August 19, 1997.
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