TELENET LETTER
(Reprinted with Permission)

Text of TELEMAIL letter sent by TELENET President to
customers re FCC proposal....

June 29, 1987

As many of you know, the FCC recently announced a
notice of proposed rulemaking to impose interstate switched
access charges on enhanced service providers (ESPs), effective
January 1, 1988. If adopted, this proposal would affect
value-added network services such as Telenet, as well as firms
providing remote computing, database services, electronic mail
and other computer-based services involving interstate data
traffic.

Switched access charges were originally designed to
apply to common carriers as compensation for their use of the
local exchange network in originating and terminating MTS/WATS
traffic. Now the FCC proposed to extend these access charges to
ESPs -- a move that would add approximately $4.50 per terminal
hour to ESP costs for local dial terminal access. (For
Telenet's PC Pursuit service, which utilizes dial access at
both ends of the Telenet network, the access charges would be
$7-9 per hour.) These charges would note be subject to volume
discounts or special time-of-day rates and would, to a great
extent, have to be passed on to our customers.

Telenet intends to join with the entire enhanced
services industry in opposing this FCC proposal. We will
vigorously assert our position before the FCC and the Congress
over the next several months, and we will be soliciting the
support of you and your users to do likewise.

Our concerns with the FCC proposal center on its
potential adverse impact upon the computer/information services
industry and its users. The proposal would have a chilling
effect upon the development of this industry because the added
costs associated with access charges would reduce demand for
services and would even price some users out of the market.
Perhaps the greatest relative impact would be felt by
residential, small business and educational computer users, who
are just beginning to have affordable information services made
available to them.

The FCC proposal would also negatively affect the
United States foreign trade balance, because computer-based
services provide an infrastructure that supports trade in other
goods and services. One of this country's greatest strengths
in the world market is our highly developed computing and
information services industry. To the extent that access
charges dampen the development of this industry, our
international trade position is weakened as well.

Additionally, the FCC's proposal is discriminatory
because it earmarks only one class of local exchange users --
ESPs and their users -- for access charge payments. Moreover,
since many private-line networks with dial access lines carry a
mixture of interstate and intrastate traffic, and are used only
partially in the provision of enhanced services, traffic
measurement and even-handed enforcement of the proposed rules
would be extremely difficult. I am confident that there are
many in industry and government -- and certainly consumers --
who will agree with our position and will join us in opposing
the FCC's proposal. I hope we can count on your support.

The FCC has not yet published its formal proposal.
Once this occurs, we will provide you with an analysis of its
provisions, and will suggest specific actions you might take to
express your views to the FCC and the Congress.

Bear in mind that the ESP access charges are not a
fait accompli. The FCC voted to solicit public comment on its
access charge proposal; it did not vote to implement such
charges.

We will be back in touch with you after the FCC's
official notice is published. In the meantime, if you have any
questions I encourage you to contact your Telenet Account
Executive.

Sincerely,
Paolo Guidi
President