8th Circuit's Stay Will Not Impact GST Telecommunications, California PUC Approves GST's Interconnection Agreement with GTE.

VANCOUVER, Ontario--(BUSINESS WIRE)--Oct. 23, 1996--GST Telecom. (AMEX GST) GST Telecommunications, Inc. announced today that the recent decision of the United States Court of Appeals for the 8th Circuit poses no concern to either GST's business plans or operations.

A facilities-based provider with existing and planned operations throughout the western United States, GST noted that the 8th Circuit's stay order relating to the Federal Communication Commission interconnection rules will have limited impact in GST's service areas.

The 8th Circuit's October 15, 1996, order stayed the "operation and effect of only the pricing provisions and the 'pick and choose' rule" contained in the FCC's ground-breaking interconnection rules, which the agency promulgated to implement a major component of the Telecommunications Act of 1996. A number of Baby Bells and state regulators challenged the FCC discount formula and the attempt at forcing the Baby Bells into a uniform pricing structure.

Network interconnection gives one carrier the ability to connect to another carrier's network, and comprehensive interconnection agreements allow companies to offer telecommunication services without incurring the expense of building an independent network.

John Warta, GST's President and CEO, observed that the stay order "neither alters the Telecommunications Act, nor freezes the vast bulk of the FCC's expansive interconnection rules. It will not impede GST's ability to provide competitive local telephone services in our existing and planned operations."

"The stay only suspends the FCC's ability to impose an aggressive pricing formula on a national basis and exposes a bit of rivalry between some federal and state regulators." He added, "GST has established its network in states predisposed to local competition even before the passage of the Telecommunications Act. GST, for example, has already been authorized to provide competitive local service in such states as California, Hawaii and Washington, and goes to hearing next month in New Mexico on a pending application before that state's public utilities commission."

Warta further added that "the California PUC has approved GST's network interconnection agreement with GTE and we are well under way in achieving comprehensive interconnection agreements with US West, GTE and Pacific Bell in all of our related service areas and have filed for arbitration in four states to ensure we obtain comprehensive agreements one way or the other."

J. Jeffrey Mayhook, GST's Vice President for Legal and Regulatory Affairs, agrees that the 8th Circuit stay will have "no appreciable impact on GST or any other company building its own networks."

Mayhook also observes that "from what some state regulators tell me, they welcomed the FCC rules and will likely enforce the controversial pricing provisions regardless of the stay. State regulators are still in the process of redefining their role in the post-Telecommunications Act universe, so, for some, there's a natural resistance to directives from Washington." He added that "all of GST's states remain committed to achieving ubiquitous local competition and the process will continue despite the stay."

GST Telecommunications, Inc., headquartered in Vancouver, Washington, currently operates networks in 15 cities and has 22 additional networks under development in the western United States and Hawaii. The company provides a broad range of integrated telecommunications products and services through the development and operation of competitive access and other telecommunications networks. GST's strategy is to cluster several cities in each state that it enters in order to achieve synergy and maximum opportunity within each service territory. In addition, the company manufactures telecommunications switching equipment and provides network management and billing systems through its wholly-owned subsidiary, National Applied Computer Technologies, Inc., of Orem, Utah.

CONTACT: GST Telecommunications, Inc.

Rob Blankstein, 800/667-4366

or

GST Telecommunications, Inc.

John Warta, 360/ 254-4700

INTERNET: http://www.gstcorp.com