Docket UT-970648                                         Page 1 
BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


In The Matter of the Sale of U S WEST  )   DOCKET UT-970648
Communications, Inc.’s Interest in     )
Bellcore Research Communications, Inc. )    ORDER GRANTING
                                       )      APPLICATION
                                       )        
                                       )
. . . . . . . . . . . . . . . . . . . .)

  On April 14, 1997, U S WEST Communications, Inc., (USWC), under protest, 
filed  an application with the Commission under the provisions of Chapter 80.12 
RCW for permission to sell the share of stock held by USWC, representing 
one-seventh ownership of Bellcore Communications Research (Bellcore) to Science 
Applications International Corporation (SAIC).  The application was 
supplemented on  July 9, 1997.

          By Declaratory Order dated April 1, 1997, in Docket No. UT-961596 the 
Commission ordered that USWC must obtain authorization from the Commission 
under Chapter 80.12 RCW prior to any sale of its one share of stock in Bellcore.

          Bellcore is a corporation owned equally by the seven regional Bell 
companies (RBOCs) created pursuant to the Consent Decree entered in United 
States v. American Tel. and Tel. Co.  Bellcore is a support services company 
providing engineering, network planning, operations, and research and 
development support to USWC and other RBOCs.  The Bellcore Board of Directors 
has determined that Bellcore can more effectively provide telecommunications 
support services if it operates independently of its current owners.  That 
determination is in part based upon substantial changes occurring within the 
telecommunications industry that make the continuation of joint ownership by 
competing companies inappropriate.  Bellcore worked with investment bankers to 
evaluate bids from potential buyers and to negotiate a proposed sale.  On 
November 21, 1996, The RBOC’s announced they had signed an agreement to sell 
their ownership of Bellcore to SAIC. 
         

          The application affirms "It is USWC's position that there is no basis 
to allocate the gain if any between shareholders and ratepayers, because the 
asset being sold has never been in ratebase."  The Commission is of the opinion 
all of any gain realized from the sale of Bellcore should accrue to the benefit 
of the ratepayers who, through time, have funded USWC's investment in Bellcore 
through a return element included in payments to Bellcore for services.  Any 
Washington intrastate gain on the sale of Bellcore should be promptly passed 
through to the benefit of customers in this state. Several mechanisms are 
available to achieve this result, including a reduction in rate base or an 
offset to rates.  The Commission believes, however, that with other rate 
changes currently under review, it is not necessary to resolve the specific 
mechanism for ratepayer benefit within the context of this proceeding.


         The business relationship after the sale between USWC and Bellcore 
will continue in that Bellcore will provide USWC services under contract in the 
same areas of operation as it does now, except it will do so as an unaffiliated 
company.  USWC will not be deprived of access to Bellcore services that USWC 
may need in the future to support the provision of telecommunications service.


  FINDINGS

  THE COMMISSION FINDS: 

  1. U S WEST Communications, Inc., a Colorado corporation, is a public service 
company subject to the jurisdiction of this Commission under the provisions of 
Chapter 80.12 RCW.

  2. As to form, the application filed herein meets the requirements of Chapter 
80.12 RCW and the rules and regulations adopted pursuant thereto.

  3.  It will not be contrary to the public interest to authorize the proposed 
sale of Bellcore Communications Research stock and the application herein 
should, therefore, be approved.


O R D E R 

  THE COMMISSION ORDERS:

  1. After the effective date of this order and subject to the conditions 
thereof, U S WEST Communications, Inc. is hereby authorized to sell the share 
of stock representing one-seventh ownership of Bellcore Communications Research 
to Science Applications International Corporation pursuant to the sale 
agreement filed as part of the application herein.

  2. Within 45 days after exercising the authority granted by this order, U S 
WEST Communications, Inc. shall file with the Commission a copy of the journal 
entries to record the sale of the share of stock authorized by this order.  

  3. This order shall in no way affect the authority of this Commission over 
rates, service, accounts, valuations, estimates or determination of costs, or 
any matters whatsoever that may come before it, nor shall anything herein be 
construed as an acquiescence in any estimate or determination of costs, or any 
valuation of property claimed or asserted.

  DATED at Olympia, Washington, and effective this 27th day of August, 1997.

 WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



                              STEVE McLELLAN, Secretary