<PAGE>


                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

          (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 1996

                                      OR

         ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


                         Commission File Number 1-1414


                                 PACIFIC BELL


                        I.R.S. Employer No. 94-0745535
                           A California Corporation


          140 New Montgomery Street, San Francisco, California 94105

                     Telephone - Area Code (415) 542-9000



Indicate  by check  mark  whether the  registrant  (1) has  filed all  reports
required to be filed by  Section 13 or 15(d) of the Securities Exchange Act of
1934  during the  preceding 12  months (or  for such  shorter period  that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.  Yes  X    No    .
                                               ---      ---

       At October 31, 1996, 224,504,982 common shares were outstanding.


THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF  PACIFIC TELESIS GROUP, MEETS THE
CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF   FORM 10-Q AND
IS  THEREFORE  FILING THIS  FORM WITH  REDUCED  DISCLOSURE FORMAT  PURSUANT TO
GENERAL INSTRUCTION H(2).



















                                    <PAGE>


                         PACIFIC BELL AND SUBSIDIARIES
                               TABLE OF CONTENTS


                                                                      Page 
PART I.  FINANCIAL INFORMATION                                       Number
------------------------------                                       ------

Item 1.  Financial Statements

            Review Report of Independent Accountants ..............     1

            Condensed Consolidated Statements of Income ...........     2

            Condensed Consolidated Balance Sheets .................     3

            Condensed Consolidated Statements of Cash Flows .......     4

            Notes to Condensed Consolidated Financial Statements ..     6

Item 2.     Management's Discussion and Analysis of Results of
            Operations ............................................    10



PART II.  OTHER INFORMATION
---------------------------

Item 6.      Exhibits.............................................     24

SIGNATURE.........................................................     25
---------

































                                    <PAGE>


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

                   REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareowner of Pacific Bell:

We  have reviewed  the accompanying  condensed consolidated  balance sheet  of
Pacific Bell and Subsidiaries (the "Company") as of September 30, 1996 and the
related condensed consolidated statements  of income for the three-  and nine-
month  periods  ended  September   30,  1996  and  1995,  and   the  condensed
consolidated  statements  of  cash  flows for  the  nine-month  periods  ended
September  30,  1996   and  1995.     These  financial   statements  are   the
responsibility of the Company's management.

We  conducted our  review  in accordance  with  standards established  by  the
American  Institute  of Certified  Public Accountants.    A review  of interim
financial information consists  principally of applying  analytical procedures
to  financial data and making  inquiries of persons  responsible for financial
and  accounting matters.   It  is substantially  less in  scope than  an audit
conducted  in  accordance  with  generally accepted  auditing  standards,  the
objective of  which is the  expression of an  opinion regarding  the financial
statements taken as a whole.  Accordingly, we do not express such an opinion.

Based  on our  review, we  are not  aware of  any material  modifications that
should be made to the accompanying condensed consolidated financial statements
for them to be in conformity with generally accepted accounting principles.

The  Company discontinued  application  of Statement  of Financial  Accounting
Standards No. 71 effective third quarter 1995.

We have  previously audited, in  accordance with  generally accepted  auditing
standards,  the consolidated balance sheet of Pacific Bell and Subsidiaries as
of  December  31, 1995,  and the  related  consolidated statements  of income,
shareowner's  equity, and  cash flows for  the year then  ended (not presented
herein);  and  in  our  report  dated  February  22,  1996,  we  expressed  an
unqualified  opinion on  those  consolidated  financial  statements.   In  our
opinion, the  information set forth in the accompanying condensed consolidated
balance  sheet as  of December  31, 1995,  is fairly  stated, in  all material
respects, in relation to the consolidated balance sheet from which it has been
derived.


/s/Coopers & Lybrand L.L.P.
San Francisco, California     

November 13, 1996









                                       1








                                    <PAGE>


                        PACIFIC BELL AND SUBSIDIARIES                      
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME                   
                             (Unaudited)

                        For the 3 Months Ended      For the 9 Months Ended
                             September 30,               September 30, 
                        ----------------------      ----------------------
(Dollars in millions)        1996         1995            1996        1995 
--------------------------------------------------------------------------
OPERATING REVENUES                                                         
Local service............ $ 1,006      $   944         $ 2,962     $ 2,803 
Network access:                                                            
  Interstate ............     448          413           1,338       1,257 
  Intrastate ............     176          179             539         522 
Toll service ............     325          306             953         910
Other service revenues ..     422          386           1,220       1,134
                           ------       ------          ------      ------
TOTAL OPERATING REVENUES    2,377        2,228           7,012       6,626 
                           ------       ------          ------      ------
OPERATING EXPENSES                                                         
Cost of products and 
  services ..............     450          399           1,287       1,323 
Customer operations and                                                    
  selling expenses ......     491          476           1,425       1,351 
General, administrative,                                                
  and other expenses ....     349          340           1,036         959 
Property and other taxes.      46           45             132         141
Depreciation and 
  amortization ..........     462          461           1,370       1,381 
                           ------       ------          ------      ------
TOTAL OPERATING EXPENSES.   1,798        1,721           5,250       5,155 
                           ------       ------          ------      ------
OPERATING INCOME.........     579          507           1,762       1,471
Interest expense.........      95          110             277         327 
Other income 
  (expense)-net..........       3           17               4          45 
                           ------       ------          ------      ------
INCOME BEFORE INCOME TAXES                                              
  AND EXTRAORDINARY ITEM.     487          414           1,489       1,189 
Income taxes.............     198          156             606         442 
                           ------       ------          ------      ------
INCOME BEFORE EXTRAORDINARY 
  ITEM ..................     289          258             883         747 
Extraordinary item, 
  net of tax.............       -       (3,360)              -      (3,360)
                           ------       ------          ------      ------
NET INCOME (LOSS)........ $   289      $(3,102)        $   883     $(2,613)
===========================================================================

The accompanying Notes are an integral part of the Condensed Consolidated    
Financial Statements.





                                       2








                                    <PAGE>

                        PACIFIC BELL AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS

                                               September 30,   December 31,
(Dollars in millions)                               1996            1995
---------------------------------------------------------------------------
ASSETS:                                         (Unaudited)                    
                                                                           
Cash and cash equivalents........................  $    78         $    68 
Accounts receivable - (net of allowances for
  uncollectibles of $156 and $131 in 1996
  and 1995, respectively)........................    1,563           1,475 
Prepaid expenses and other current assets........      847             802 
                                                   -------         -------
Total current assets.............................    2,488           2,345 
                                                   -------         -------
Property, plant, and equipment - at cost.........   27,808          26,688 
  Less:  accumulated depreciation................  (16,501)        (15,608)
                                                   -------         -------
Property, plant, and equipment - net.............   11,307          11,080 
                                                   -------         -------
Other noncurrent assets..........................      465             474 
                                                   -------         -------
TOTAL ASSETS.....................................  $14,260         $13,899 
                                                   =======         =======

LIABILITIES AND SHAREOWNER'S EQUITY:

Accounts payable and accrued liabilities.........  $ 1,953         $ 2,109 
Debt maturing within one year....................      608             781 
Other current liabilities........................      475             552 
                                                   -------         -------
Total current liabilities........................    3,036           3,442 
                                                   -------         -------
Long-term obligations............................    5,295           4,608 
                                                   -------         -------
Deferred income taxes............................      443             321 
                                                   -------         -------
Other noncurrent liabilities and deferred credits    2,124           2,417 
                                                   -------         -------
Commitments and contingencies (Note B)                                   
                                                                           
Common stock ($1.00 stated value, 300,000,000                              
  shares authorized, 224,504,982 shares issued                                 
  and outstanding)...............................      225             225 
Additional paid-in capital.......................    5,586           5,387 
Accumulated deficit..............................   (2,449)         (2,501)
                                                   -------         -------
Total shareowner's equity........................    3,362           3,111 
                                                   -------         -------
TOTAL LIABILITIES AND SHAREOWNER'S EQUITY........  $14,260         $13,899 
==========================================================================
                                                                         
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements. 


                                       3








                                    <PAGE>


                        PACIFIC BELL AND SUBSIDIARIES                        
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
                                (Unaudited)                                  
                                                     For the 9 Months Ended 
                                                           September 30, 
                                                     ---------------------- 
(Dollars in millions)                                      1996        1995
---------------------------------------------------------------------------
CASH FROM (USED FOR) OPERATING ACTIVITIES:                                   
Net income (loss)...................................    $   883     $(2,613)
Adjustments to reconcile net income (loss) to cash 
 from operating activities:

 Extraordinary item.................................          -       3,360
 Depreciation and amortization......................      1,370       1,381 
 Change in deferred income taxes....................        133          53 
 Unamortized investment tax credits.................        (35)        (37)

 Changes in operating assets and liabilities:
   Accounts receivable..............................       (107)         49 
   Prepaid expenses and other current assets........        (37)        (22)
   Other noncurrent assets..........................         15         135 
   Accounts payable and accrued liabilities.........       (139)       (115)
   Other current liabilities........................        (77)         24 
   Noncurrent liabilities and deferred credits......       (258)       (343)
   Other adjustments, net...........................          6           8 
                                                        -------     -------
Cash from operating activities......................      1,754       1,880 
                                                        -------     -------
CASH USED FOR INVESTING ACTIVITIES:               
Additions to property, plant, and equipment..........    (1,597)     (1,285)
Other investing activities, net......................       (32)         (1)
                                                        -------     -------
Cash used for investing activities...................    (1,629)     (1,286)
                                                        -------     -------
CASH FROM (USED FOR) FINANCING ACTIVITIES:                                   
Equity infusion from parent..........................       198          57
Proceeds from issuance of long-term debt.............       495           - 
Dividends paid.......................................      (830)       (763)
Increase (decrease) in short-term borrowings, net....      (186)        120
Proceeds from sale and leaseback transactions........       211           - 
Other financing activities, net......................        (3)         (4)
                                                        -------     -------
Cash used for financing activities...................      (115)       (590)
                                                        -------     -------

                           (Continued on next page)









                                       4








                                    <PAGE>


                         PACIFIC BELL AND SUBSIDIARIES                        
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
                                  (Unaudited)                                  
                                  (Continued)

                                                     For the 9 Months Ended
                                                          September 30, 
                                                     ---------------------- 
(Dollars in millions)                                      1996        1995
---------------------------------------------------------------------------
Increase in cash and cash equivalents...............         10           4 
Cash and cash equivalents at January 1..............         68          62 
                                                        -------     -------
Cash and cash equivalents at September 30...........    $    78     $    66 
                                                        =======     =======

Cash payments for:                                                           
  Interest..........................................    $   305     $   317 
  Income taxes......................................    $   253     $   396    

============================================================================
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements.

































                                       5








                                    <PAGE>


                         PACIFIC BELL AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


A.   BASIS OF PRESENTATION

     The Condensed  Consolidated Financial Statements include  the accounts of
     Pacific Bell, and its  wholly-owned subsidiaries, Pacific Bell Directory,
     Pacific Bell Information Services,  Pacific Bell Mobile Services, Pacific
     Bell  Internet Services,  Pacific  Bell Network  Integration and  others,
     hereinafter referred to  as the "Company".   All significant intercompany
     balances   and   transactions   have  been   eliminated.   The  Condensed
     Consolidated  Financial  Statements  reflect  reclassifications  made  to
     conform  with the current year presentation.  These reclassifications did
     not affect net income or shareowner's equity.

     The  Condensed Consolidated  Financial Statements  have been  prepared in
     accordance  with the rules and regulations of the Securities and Exchange
     Commission ("SEC") applicable to  interim financial information.  Certain
     information and  footnote  disclosures included  in financial  statements
     prepared in accordance with generally accepted accounting principles have
     been  condensed or omitted in  these interim statements  pursuant to such
     SEC  rules and  regulations.   Management  recommends that  these interim
     financial statements be read in conjunction with the audited consolidated
     financial statements  and notes  thereto included  in the  Company's 1995
     annual report on Form 10-K.  

     Effective third quarter 1995,  for external financial reporting purposes,
     the  Company  discontinued  the  application of  Statement  of  Financial
     Accounting  Standards  No. ("SFAS")  71, "Accounting  for the  Effects of
     Certain Types of Regulation," an accounting standard for entities subject
     to traditional  regulation.  As  a result, during third  quarter 1995 the
     Company  recorded   a  non-cash,   extraordinary,  after-tax  charge   of
     $3.4 billion.

     In management's opinion, the Condensed Consolidated Financial  Statements
     include all adjustments (consisting of only normal recurring adjustments)
     necessary  to  present  fairly  the financial  position  and  results  of
     operations for each  interim period  shown.   The Condensed  Consolidated
     Financial  Statements have  been  reviewed by  Coopers &  Lybrand L.L.P.,
     independent accountants.  Their report is on page 1.

     Change In Estimates

     In  March 1996,  management  amended  the  salaried pension  plan,  which
     changed  from a final pay  plan to a  cash balance plan.   As a result of
     the approval of  this plan amendment, in second quarter  1996 the Company
     updated its actuarial assumptions  to reflect changes in  market interest
     rates  and  recent  experience,  including  a  change  in its  assumption
     concerning future ad hoc increases in pension benefits.  These changes in
     estimates increased net income by approximately $75 million for the first
     nine months of 1996 in comparison to the same period in 1995.



                                       6








                                    <PAGE>


                         PACIFIC BELL AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


     B.   COMMITMENTS AND CONTINGENCIES

          Merger Agreement

          On  April 1,  1996,  SBC  Communications  Inc. ("SBC")  and  Pacific
          Telesis,  the  Company's  parent,  jointly  announced  a  definitive
          agreement  whereby  Pacific  Telesis  will   become  a  wholly-owned
          subsidiary of  SBC.  Under terms of the merger agreement, each share
          of Pacific Telesis common  stock will be exchanged for  0.733 shares
          of  SBC common  stock, subject  to adjustment.   The  transaction is
          intended to be accounted  for as a pooling of interests and  to be a
          tax-free  reorganization.   On  July 31,  1996,  the shareowners  of
          Pacific Telesis  and SBC approved the  transaction, which previously
          had  been  approved by  the respective  Board  of Directors  of each
          company.     On November  5, 1996,  the U.S.  Department of  Justice
          announced  it had  concluded that  the merger  does not  violate the
          antitrust laws and accordingly that it was closing its investigation
          into the merger.  The merger is subject to certain other  conditions
          and  regulatory   approvals.     The  California   Public  Utilities
          Commission ("CPUC")  has established  a schedule  for review of  the
          transaction  with  final comments  from  interested  parties due  in
          January  1997.   On  September 30,  1996,  the Office  of  Ratepayer
          Advocates ("ORA"),  the consumer interest branch of  the CPUC, filed
          testimony  in  the merger  proceeding  recommending  a $2.1  billion
          refund  to customers payable over  five years.   Management does not
          agree with the ORA's recommendation and  believes no customer rebate
          should  be  required in  connection with  the merger.   The  CPUC is
          expected to make a final decision on the  merger by the end of March
          1997.  In Nevada, SBC and Pacific Telesis entered into a stipulation
          with the staff of  the Public Service Commission of  Nevada ("PSCN")
          and  the Office of the Consumer Advocate  to refund to customers the
          greater of $4 million or 2.0 percent of the amount,  if any, ordered
          by the CPUC to be refunded to Pacific Bell customers.  The refund is
          conditioned on approval of  the stipulation by the PSCN  and closing
          of the  merger.  The  PSCN has scheduled  hearings for November  25,
          1996, and approval is expected in  December 1996.  If all  necessary
          approvals are granted, the  transaction is expected to close  in the
          first quarter of 1997.













                                       7








                                    <PAGE>


                         PACIFIC BELL AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


B.   COMMITMENTS AND CONTINGENCIES (Cont'd)

     Purchase Commitments
    
     In  December  1994, the  Company  contracted for  the purchase  of  up to
     $2 billion  of  Advanced Communications  Network  facilities, which  will
     incorporate emerging technologies.  The  Company is committed to purchase
     these facilities in  1998 if  they meet certain  quality and  performance
     criteria.  Management now  expects the actual amount of  these facilities
     purchased in 1998 will be less than $700 million.

     As of  September 30, 1996, the Company  had purchase commitments of about
     $212 million  remaining  in  connection  with  its  previously  announced
     program  for deploying  an all-digital switching  platform with  ISDN and
     SS-7 capabilities.

     Revenues Subject to Refund

     In  1992,  the  CPUC  issued  a  decision  adopting,  with  modification,
     SFAS 106, "Employers' Accounting  for Postretirement Benefits  Other than
     Pensions,"  for  regulatory  accounting   purposes.    Annual  price  cap
     decisions by the CPUC  granted the Company approximately $100  million in
     each of the  years 1993-1996 for  partial recovery of higher  costs under
     SFAS 106.   However, the CPUC in October 1994  reopened the proceeding to
     determine  the criteria  for  exogenous cost  treatment  and whether  the
     Company should  continue to recover these  costs.  The CPUC's  order held
     that related revenues  collected after  October 12, 1994  are subject  to
     refund  plus interest.   It is possible  that the CPUC  could decide this
     issue  in the  near term,  and that  the decision  could have  a material
     adverse  effect on  the  Company.   Related  revenues subject  to  refund
     totaled  about $197 million at  September 30, 1996.   Management believes
     postretirement  benefits  costs  are  appropriately  recoverable  in  the
     Company's price cap filings.


















                                       8








                                    <PAGE>

                         PACIFIC BELL AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


B.   COMMITMENTS AND CONTINGENCIES (Cont'd)
     Property Tax Investigation

     In 1992, a  settlement agreement was reached  between the State  Board of
     Equalization, all  California counties,  the State Attorney  General, and
     28 utilities,  including  the  Company,  on a  specific  methodology  for
     valuing utility property for property tax purposes for a  period of eight
     years.  The CPUC  opened an investigation  to determine if any  resulting
     property tax savings should  be returned to customers.   Intervenors have
     asserted  that  as much  as $20 million  of  annual property  tax savings
     should be treated as an exogenous  cost reduction in the Company's annual
     price  cap filings.    These intervenors  have  also asserted  that  past
     property tax savings totaling as much as approximately $66 million  as of
     September  30,  1996,  plus  interest should  be  returned  to customers.
     Management  believes that,  under  the CPUC's  regulatory framework,  any
     property  tax savings  should  be  treated only  as  a  component of  the
     calculation  of  shareable earnings  not  as an  exogenous cost.    In an
     Interim Opinion  issued in June 1995,  the CPUC decided to  defer a final
     decision  on this matter pending resolution of the criteria for exogenous
     cost  treatment under its regulatory  framework.  The  criteria are being
     considered in a separate proceeding initiated for rehearing of the CPUC's
     postretirement benefits other than pensions decision discussed above.  It
     is  possible that the CPUC could decide  this issue in the near term, and
     that the decision could have a material adverse effect on the Company.

C.   DEBT ISSUANCES

     The Company issued $500  million of debentures, $250 million  in February
     1996 at 5.875 percent due  February 15, 2006, and $250 million  in August
     1996 at 6.875 percent due August 15, 2006.  Neither issue may be redeemed
     prior to  maturity.  The  proceeds from the  sale of the  debentures were
     used  to  reduce  short-term  debt  incurred  to   retire  the  Company's
     debentures totaling approximately $500 million called in December 1995.

     The  Company has remaining CPUC authority, which will expire December 31,
     1996,  to issue up to  $750 million of  long- and intermediate-term debt.
     The Company  plans to make an  application to renew this  authority.  The
     proceeds may  be used only to redeem maturing debt and to refinance other
     debt issues. The Company has remaining authority from the SEC to issue up
     to  $150  million of  long- and  intermediate-term  debt through  a shelf
     registration filed in April 1993.











                                       9








                                    <PAGE>


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

In addition to historical information  contained herein, this quarterly report
on  Form  10-Q  contains   certain  forward-looking  statements  that  involve
potential  risks and  uncertainties.   Pacific  Bell's (the  "Company") future
results could differ  materially from  those discussed herein.   Factors  that
could cause or contribute to such differences include, but are not limited to,
those discussed  herein and  those discussed  in "Management's  Discussion and
Analysis of Results of Operations" included in the Company's December 31, 1995
Form  10-K.   Readers  are  cautioned not  to  place undue  reliance  on these
forward-looking  statements which  speak  only as  of  the date  hereof.   The
Company undertakes  no obligation  to revise  or update  these forward-looking
statements to  reflect events  or circumstances  after the date  hereof or  to
reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

The following discussions  and data compare the  results of operations  of the
Company  for   the  nine-month  period   ended  September  30,  1996   to  the
corresponding period in 1995.   Results for the first nine months  of 1996 may
not be indicative of results for the full year.

A summary of selected operating data is shown below:

                                                      For the 9 Months Ended
                                                           September 30,
                                                     -----------------------
                                                                       %  
Operating Statistics                                 1996     1995  Change
----------------------------------------------------------------------------
Return on shareowner's equity (%)...............     36.4    -57.5       -
Capital expenditures ($mil).....................    1,596    1,201    32.9
Total employees at September 30.................   46,193   48,359    -4.5
Telephone network employees at September 30*....   43,444   45,793    -5.1
Telephone network employees per ten thousand
  access lines*.................................     27.1     29.8    -9.1
============================================================================
*    Excludes Pacific Bell Directory and Pacific Bell Mobile Services
     employees.

















                                      10








                                    <PAGE>


Earnings
--------

The Company's  earnings  continue to  reflect  revenue growth  from  increased
customer demand for local telephone products associated with marketing efforts
and California's growing economy,  offset by expenses to prepare  to enter new
businesses  and  to comply  with  local  competition  mandates.   The  Company
reported net income  of $883  million for the  first nine  months of 1996,  an
18.2 percent increase over the $747 million before extraordinary item reported
for  the same period  last year. The  extraordinary item was  a one-time, non-
cash, after-tax charge  of $3.4 billion recorded  in third quarter 1995.   The
extraordinary charge resulted from the discontinued application by the Company
of special accounting rules for entities subject to traditional regulation and
its change  to the general  accounting rules used by  competitive enterprises.
(See "Extraordinary Item" on page 17.) 

For the first nine  months in 1995, pressure on  earnings before extraordinary
item resulted from incremental labor expense associated with the severe storms
in early 1995.   These earnings decreases in 1995 were partially offset by the
Company's ongoing cost-reduction efforts.

The  California Public  Utilities Commission  ("CPUC")  authorized facilities-
based   local  services  competition   effective  January  1996,   and  resale
competition effective March  1996.   Certain issues remain  open in the  local
competition proceedings.  (See "CPUC  Local Services Competition" on page 22.)
As of  September 30,  1996, such  competition had  not yet  had a  significant
effect on the Company's earnings.  In August 1996, the  Federal Communications
Commission  ("FCC") released a  decision establishing guidelines  to implement
the 1996 Telecommunications Act, which sets additional rules for opening local
telecommunications markets  to full  competition.   (See "FCC  Interconnection
Order"  on  page 21.)    Management  is  concerned  that final  terms  set  by
regulators could deprive the Company of the  opportunity to earn a fair return
on investment.























                                      11








                                    <PAGE>


Volumes
-------                                              For the 9 Months Ended
                                                           September 30,     
                                                    -------------------------
                                                                         %  
Volume Indicators                                    1996     1995    Change  
-----------------------------------------------------------------------------
Switched access lines in service
 at September 30 (thousands).....................  16,018  15,348*     4.4
    Residence....................................   9,979   9,621*     3.7
    Business.....................................   5,829   5,521*     5.6
    Other........................................     210     206*     1.9
    ISDN access lines (Included in above 
      access lines)..............................      90      43    109.3

Interexchange carrier access
  minutes-of-use (millions)......................  47,307  43,210      9.5
    Interstate...................................  25,961  23,715      9.5
    Intrastate...................................  21,346  19,495      9.5

Toll messages (millions).........................   3,870   3,596      7.6
Toll minutes-of-use (millions)...................  11,521  10,825      6.4

Voice mailbox equivalents at Sept. 30(thousands).   1,649   1,360     21.3
Custom calling services at Sept. 30(thousands)...   7,758   7,037     10.3
============================================================================
*  Restated

The  total  number of  access  lines in  service  grew to  16.018  million, an
increase of 4.4 percent for the twelve  months ended September 30, 1996.  This
is an improvement over the 2.7 percent increase for the same period last year.
The  residential access  line  growth rate  increased to  3.7 percent  for the
twelve months ended September 30, 1996,  from 1.7 percent last year.   Changes
in  technology, telecommuting,  Internet access  and  the Company's  marketing
efforts continue  to fuel increased  demand for additional telephone  lines in
the  home.    Second  access  lines  in  residences  grew  14.1  percent  from
1.732 million  lines  to 1.976  million  lines  for  the twelve  months  ended
September 30, 1996.  The growth rate  in business access lines was 5.6 percent
for the twelve  months ended September 30, 1996,  up from 4.4 percent  for the
same period last year.   The number of ISDN lines  in service for the  Company
grew to 90 thousand, an increase of 109.3  percent for the twelve months ended
September 30, 1996,  as customers increased telecommuting  and demanded faster
data transmission and  Internet access.  Accelerated demand  for the Company's
high-speed data  transmission continued through  the third quarter due  to the
Company's intensified marketing efforts.

Access minutes-of-use represent the volume of traffic carried by interexchange
carriers over  the Company's local  network.  Total access  minutes-of-use for
the nine months  ended September 30,  1996 increased by  9.5 percent over  the
same  period last year.   The increase in  access minutes-of-use was primarily
attributable to the continued economic growth in California.





                                      12








                                    <PAGE>


Toll messages and  minutes-of-use are comprised of  Message Telecommunications
Service and  Optional  Calling  Plans  ("local  toll") as  well  as  WATS  and
terminating 800 services.   For the nine months ended September 30, 1996, toll
minutes-of-use increased  by  6.4 percent  driven  by the  continued  economic
growth in California.

High demand for  the Company's voice mail  products continued in 1996.   Voice
mailbox equivalents  in service increased  21.3 percent for the  twelve months
ended  September  30, 1996  to 1.649  million.   Similarly, demand  for custom
calling  services, such  as  call waiting,  grew 10.3  percent for  the twelve
months ended September 30,  1996 due to  California's growing economy and  the
Company's focused customer retention efforts. 

Operating Revenues
------------------
                                                     For the 9 Months Ended
                                                           September 30,     
                                                     ------------------------
($ millions)                                         1996     1995     Change
-----------------------------------------------------------------------------
Total operating revenues .......................   $7,012   $6,626       $386
                                                                         5.8%
-----------------------------------------------------------------------------

Revenues for the first nine months of 1996 increased from the same period last
year primarily  due to increased  customer demand for the  Company's telephone
services  driven  by  marketing  efforts  and  California's  growing  economy.
Revenues for  the  nine-months  ended September  30,  1996 were  offset  by  a
$55 million rate reduction  due to  FCC price  cap orders.   Revenues for  the
six months ended June 30, 1996, decreased $60 million due to the FCC price cap
filing for the twelve months ending June 30, 1996.  For the 1996 annual access
tariffs  filings  effective  July 1,  1996,  revenues  increased approximately
$5 million for the three-month  period ending September  30, 1996.  (See  "FCC
Annual Access Tariff Filing and Regulatory Framework Review" on page 22.)  The
CPUC  price cap order effective  January 1, 1996, had  a minimal effect on the
Company's  revenues due  to an order  in December  1995 suspending use  of the
"inflation minus  productivity" component  of the price  cap formula  for 1996
through 1998.   This action  freezes the price caps  on most of  the Company's
regulated services through 1998 except  for adjustments due to exogenous costs
or price changes  approved through the CPUC's application process.  (See "CPUC
Regulatory Framework Review" on page 23.)















                                      13








                                    <PAGE>


Factors affecting revenue changes are summarized in the following table.  
    
                                                                       Total
                                         Price                        Change
                                           Cap            Customer      From
                                        Orders     Misc.    Demand      1995
-----------------------------------------------------------------------------
Local service........................     $  -       $15      $144      $159
Network access:
  Interstate.........................      -55        54        82        81
  Intrastate.........................        -       -19        36        17
Toll service.........................        -       -24        67        43
Other service revenues...............        -        10        76        86
                                         -----     -----     -----      ----
Total operating revenues.............     $-55       $36      $405      $386
=============================================================================

The $144 million increase in customer demand for local service revenues is the
result of the 4.4 percent growth  in access lines and the 10.3 percent  growth
in custom calling  services. These increases were generated  by the continuing
growth in the California economy  and the Company's focused customer retention
efforts.  In addition, the Company introduced a new feature, "Call Return," on
a "pay-per-use" basis  in April 1996 that generated  revenues of approximately
$30 million for 1996.

The $82 million increase in interstate network access revenues due to customer
demand reflects increased interexchange carrier access minutes-of-use, as well
as increased access  lines.  The $36 million  customer demand-related increase
in  intrastate network  access revenues  also resulted  from growth  in access
minutes-of-use.

The $67 million increase  in toll service revenues due to  customer demand was
driven primarily by increased local toll usage resulting from general economic
growth.  The  customer demand-related increase in local  toll service revenues
was  partially  offset  by  competitive  losses  in  WATS  and  800  services.
Interexchange carriers  currently have the competitive advantage of being able
to offer WATS and 800 service both within and between service areas.

The  $76 million  increase in  other service revenues  due to  customer demand
reflects  the continuing  success of  the  Company's voice  mail products  and
directory operations.  In addition, primarily in the second and third quarters
of 1996, customer  demand-related revenues increased in  the Company's network
integration services. 













                                      14








                                    <PAGE>


Operating Expenses
------------------
                                                     For the 9 Months Ended
                                                          September 30,
                                                     ------------------------
($ millions)                                        1996     1995     Change
-----------------------------------------------------------------------------
Total operating expenses.......................   $5,250   $5,155        $95
                                                                        1.8%
-----------------------------------------------------------------------------

Total operating  expenses for the  nine-month period ended September  30, 1996
increased when  compared with 1995  reflecting costs for increased  demand for
products and services, new business  initiatives and costs incurred to prepare
for  local competition.   Increased  expenses  were partially  offset by  cost
reductions from  the Company's ongoing  efficiency efforts and savings  due to
changes  in employee  benefit plans  and  benefit plan  assumptions.   Primary
factors affecting expense changes are summarized below.
 
                                                                        Total
                                                                       Change
                                  Salaries  Employee            Subsi-   From
($ millions)                      & Wages*  Benefits*  Misc.*  diaries   1995
-----------------------------------------------------------------------------
Cost of products and services..        $6      $-94       $55     $-3   $-36
Customer operations  
  and selling expenses.........         6       -49        29      88     74
General, administrative
  and other expenses...........         5       -12       112     -28     77
Property and other taxes.......         -         -        -9       -     -9
Depreciation and amortization..         -         -       -15       4    -11
                                     ----      ----      ----    ----   ----
Total operating expenses.......       $17     $-155      $172     $61    $95
=============================================================================
*  Excludes Pacific Bell subsidiaries.

Excluding  its subsidiaries,  the Company's  salary and  wage expense  for the
nine-month period ended  September 30, 1996 increased $17  million compared to
the same period in 1995, primarily  due to wage increases associated with  new
labor agreements effective  August 1995 and overtime  in the second  and third
quarters of  1996 due  to increased  business volumes.   These  increases were
mostly  offset by  force  reduction  programs.   Decreased  overtime in  first
quarter 1996 due to milder weather when compared to 1995 also partially offset
the increases.












                                      15








                                    <PAGE>


Excluding its  subsidiaries, the Company's  employee benefits expense  for the
nine-month period ended September 30,  1996 decreased $155 million compared to
the same period in 1995 primarily due to changes in employee benefit plans and
a  related remeasurement of  benefit plan  expense.   The changes  in employee
benefit plans  and benefit plan  assumptions will continue to  produce savings
through year end  and are expected to produce savings in future periods.  (See
"Change In Estimates" under Note A on page 6.)

Excluding its subsidiaries, the  Company's miscellaneous cost of products  and
services, and  general, administrative  and other  expenses increased  for the
nine-month period ended  September 30, 1996 compared to  1995 primarily due to
costs  incurred  to  prepare  for  local  competition  and  contract  services
associated with increased demand for products and services.

Excluding its  subsidiaries, the  Company's miscellaneous  property and  other
taxes decreased for the nine-month period ended September 30, 1996 compared to
1995 primarily due to nonrecurring audit adjustments accrued in 1995.

Depreciation expense  at the  Company, excluding  its subsidiaries,  decreased
$15 million for  the nine-month  period ended September  30, 1996  compared to
1995  primarily  due  to  the  elimination  of  the  amortization  of  certain
regulatory assets associated with the discontinued application of Statement of
Financial Accounting Standards No. ("SFAS") 71, "Accounting for the Effects of
Certain Types  of Regulation."   (See "Extraordinary Item"  on page 17.)   The
effect of  this  decrease was  partially offset  by higher  telecommunications
plant balances.

The  Company's  subsidiaries'   customer  operations   and  selling   expenses
increased  $88 million  for the  nine-month  period ended  September 30,  1996
compared  to  1995   due  to  new  business  initiatives,   such  as  Personal
Communications Services ("PCS"), Internet access and network integration.

The  Company's  subsidiaries'  general,   administrative  and  other  expenses
decreased  $28 million  for the  nine-month  period ended  September 30,  1996
compared to 1995 primarily due to reduced software expenses.

Interest Expense
----------------
                                                     For the 9 Months Ended
                                                          September 30,
                                                     ------------------------
($ millions)                                        1996     1995     Change
-----------------------------------------------------------------------------
Interest expense................................    $277     $327       $-50
                                                                      -15.3%
-----------------------------------------------------------------------------

Interest expense decreased for the  nine-month period ended September 30, 1996
compared to 1995.  This decrease was due  to lower interest rates and a change
in classification of interest capitalized  during construction from an item of
other  income to  a reduction  in  interest expense  due  to the  discontinued
application of SFAS 71.




                                      16








                                    <PAGE>


Other Income (Expense) - Net
----------------------------
                                                       For the 9 Months Ended
                                                           September 30,     
                                                       -----------------------
($ millions)                                        1996     1995     Change
------------------------------------------------------------------------------
Other income (expense) - net ..................       $4     $ 45       $-41
                                                                      -91.1%
------------------------------------------------------------------------------

Other income (expense)-net decreased for the nine-month period ended September
30, 1996  compared to  1995 primarily  due to  a change  in classification  of
interest capitalized  during construction from  an item  of other income  to a
reduction of  interest expense and  due to interest  income received on  a tax
refund in first quarter 1995.

Income Taxes
------------
                                                      For the 9 Months Ended
                                                            September 30,
                                                      ------------------------
($ millions)                                        1996     1995     Change
------------------------------------------------------------------------------
Income taxes......................................  $606     $442       $164
                                                                       37.1%
------------------------------------------------------------------------------

Income tax  expense increased  for the nine-month  period ended  September 30,
1996  compared  to  1995  primarily  due to  higher  pre-tax  income  and  tax
adjustments.


Extraordinary Item
------------------

Effective third quarter  1995, for external financial  reporting purposes, the
Company discontinued  the application of  SFAS 71, an accounting  standard for
entities subject to traditional regulation.  As a result, during third quarter
1995 the  Company  recorded a  non-cash,  extraordinary, after-tax  charge  of
$3.4 billion.















                                      17








                                    <PAGE>


Status of Reserves
------------------

As previously reported, the Company established a restructuring reserve at the
end of 1993 to provide for the incremental cost of force  reductions and other
related costs  to restructure  its internal  business processes  through 1997.
After  new  hires,  net  force   reduction  for  the  Company,  excluding  its
subsidiaries, was approximately  1,225 employees for the first  nine months of
1996.  A total of $141  million in cash outlays was charged to  the reserve in
the  first nine months of 1996.  In 1995, the Company  charged $219 million to
the restructuring  reserve for  the cost through  1997 of  enhanced retirement
benefits negotiated in the 1995 union contracts.  Based on its experience, the
Company  this   year  revised   its  estimate  of   these  retirement   costs.
Consequently,  $64 million  of these  1995  noncash charges  were reversed  in
second quarter  1996.  There was no effect on  net income from either the 1995
charge or  the 1996 change in estimate.  As of September 30, 1996 $142 million
remained in the restructuring reserve.

Capital Expenditures
--------------------

The Company invested  $1,596 million through September 30,  1996, primarily in
the Company's  core telecommunications  network and   the Pacific  Bell Mobile
Services PCS network.
































                                      18








                                    <PAGE>


CREDIT RATINGS

In March 1996, Moody's Investors Services, Inc. ("Moody's"), placed the senior
long-term debt ratings of the Company under review for possible downgrade.  In
August 1996, Moody's downgraded the Company's debentures and notes to  A1 from
Aa3 and the shelf registration of  debt securities to (P)A1 from (P)Aa3.   The
downgrades were prompted  by Moody's concerns about the ability of the Company
to continue to generate the same level of highly predictable cash flows in  an
increasingly uncertain competitive and regulatory environment. 

In  April 1996,  reflecting  the  announcement of  the  merger agreement  with
SBC Communications  Inc. ("SBC"), Standard & Poor's Corporation reaffirmed its
rating of  Double-A-Minus ("AA-") on  the Company's debentures and  its credit
rating outlook as negative.   (See "Merger Agreement" under Note B on page 7.)
Also  reflecting the  merger  agreement announcement,  Duff  and Phelps,  Inc.
reaffirmed its ratings of Duff 1+ and Double-A-Minus ("AA-") on  the Company's
commercial paper and debentures, respectively.

The  following are  commercial paper and  bond ratings  for the  Company as of
September 30, 1996:

                            Moody's Investors    Standard &     Duff and
                              Services, Inc.   Poor's Corp.    Phelps, Inc.
                            -----------------   ------------   ------------
Commercial Paper............      Prime-1           A-1+          Duff 1+
Long- and Intermediate-
   Term Debt................         A1              AA-            AA-  
   

The above ratings reflect the views of  the rating agencies and are subject to
change.    The  ratings   should  be  evaluated  independently  and   are  not
recommendations to buy, sell, or hold the securities of the Company.  
























                                      19








                                    <PAGE>


MERGER AGREEMENT

On  April 1,  1996, SBC  and Pacific  Telesis, the  Company's  parent, jointly
announced a definitive agreement whereby Pacific Telesis will become a wholly-
owned  subsidiary of SBC.  Under terms of  the merger agreement, each share of
Pacific Telesis  common stock will be exchanged for 0.733 shares of SBC common
stock, subject to adjustment.  The transaction is intended to be accounted for
as a  pooling of interests  and to be  a tax-free reorganization.  On July 31,
1996, the shareowners  of Pacific  Telesis and SBC  approved the  transaction,
which previously had  been approved by  the respective  Board of Directors  of
each company.   On November 5, 1996, the U.S.  Department of Justice announced
it  had concluded  that the  merger does  not violate  the antitrust  laws and
accordingly that it was closing its investigation into the merger.  The merger
is  subject to  certain  other  conditions  and  regulatory  approvals.    The
California Public Utilities Commission ("CPUC") has established a schedule for
review of the transaction with  final comments from interested parties due  in
January  1997.   On  September  30, 1996,  the  Office of  Ratepayer Advocates
("ORA"),  the consumer  interest branch  of the CPUC,  filed testimony  in the
merger proceeding recommending a $2.1 billion refund to customers payable over
five  years.   Management does  not agree  with the  ORA's recommendation  and
believes no customer rebate should be required  in connection with the merger.
The CPUC is  expected to make  a final decision  on the merger  by the end  of
March 1997.   In Nevada,  SBC and Pacific  Telesis entered into  a stipulation
with  the staff of  the Public Service  Commission of Nevada  ("PSCN") and the
Office of  the  Consumer  Advocate  to  refund to  customers  the  greater  of
$4 million or 2.0  percent of the amount,  if any, ordered  by the CPUC to  be
refunded to Pacific Bell customers.  The refund is conditioned on approval  of
the stipulation by the PSCN and closing of the merger.  The PSCN has scheduled
hearings for November 25, 1996, and approval is expected in December 1996.  If
all necessary approvals are granted, the  transaction is expected to close  in
the first quarter of 1997.


PENDING REGULATORY ISSUES
   
FCC Recommendation on Universal Service
---------------------------------------
 
On November 7, 1996,  the Joint Federal-State Board on  Universal Service (the
"Board")  issued a  recommendation on  how to  implement sections of  the 1996
Telecommunications  Act regarding  universal  service.    Generally  the  plan
creates a system that identifies cost subsidies  in rural and high-cost areas.
However,  the Board deferred a recommendation  on how large the subsidy should
be.  The Board also recommended creation of a $2.25 billion fund for providing
discounted services to schools and libraries.   The FCC has until May 8,  1997
to issue a final decision on this matter.    










                                      20








                                    <PAGE>


FCC Interconnection Order
-------------------------
    
In  August 1996,  the FCC  released a  decision (the  "Interconnection Order")
establishing  guidelines to implement  the 1996 Telecommunications  Act, which
sets rules for opening local telecommunications markets to full competition. 
The Interconnection Order  lays out how long-distance companies  and other new
competitors may connect to local networks and sets guidelines and prices for
network  components.   Management  believes  that  the  Interconnection  Order
undermines  the intent  of the  1996  Telecommunications Act  by, among  other
things,  denying  states  a role  in  managing and  setting  prices  for local
markets.  Management is also concerned that the order requires local telephone
companies to offer wholesale network services at unrealistically low prices.  
The  Company,  along  with  other  local  telephone  companies,  the  National
Association of Regulatory  Utility Commissioners and state PUCs  including the
CPUC,  appealed the Interconnection Order to a federal court.   On October 15,
1996,  the  U.S. Court  of  Appeals  for the  Eighth  Circuit  (the "Court  of
Appeals")  issued a partial stay  of the Interconnection  Order that stays the
operation and effect of the pricing provisions and the "pick and choose" rule,
but allows the non-pricing elements  of the order to go into effect.  The U.S.
Supreme Court issued  a memorandum decision on  November 12, 1996 refusing  to
overturn the stay imposed by the Court of Appeals. 

The   Interconnection   Order   also   addressed   the   issue   of   wireless
interconnection,  or  the arrangements  under  which  local exchange  carriers
("LECs") are compensated for interconnecting  with and terminating traffic for
commercial mobile  radio service  ("CMRS") providers (including  cellular, PCS
and paging).  The Interconnection Order ruled that CMRS providers are entitled
to reciprocal compensation arrangements for transport and termination of local
telecommunications traffic.  On November 1, 1996 the Court of Appeals lifted a
part of the stay described above with respect to the non-price  aspects of the
FCC's reciprocal compensation  rules for CMRS providers.  As  a result of this
order, the Company is currently renegotiating its CMRS contracts.























                                      21








                                    <PAGE>


FCC Annual Access Tariff Filing and Regulatory Framework Review
---------------------------------------------------------------

The Company  filed its  1996 annual access  tariffs with  the FCC,  which will
increase annual revenues  by approximately $27 million, for  the twelve months
beginning July 1, 1996.  The revenue increases are under review by the FCC.

The FCC  adopted new interim  price cap rules  in 1995 that  govern the prices
that the larger LECs, including the Company, charge interexchange carriers for
access  to local telephone  networks.  The  interim rules require  the LECs to
adjust their maximum prices for changes in inflation, productivity and certain
costs beyond the control of the LEC.  Under the interim plan, LECs may  choose
from three productivity  factors:  4.0, 4.7 or  5.3 percent.  Election  of the
5.3 percent productivity factor permits the LEC  to retain all of its earnings
whereas the  other lower  productivity factors require  earnings to  be shared
with  customers.    As  in  1995,  the  Company  again  chose the  5.3 percent
productivity  factor  that will  enable  it to  retain  all of  its   earnings
effective July  1, 1996.   The higher  productivity factor was  chosen because
management  believes that it  will be more  than offset by  elimination of the
sharing  mechanism.   An  FCC ruling  on  permanent price  cap rules  has been
delayed until  1997 due to  the implementation of the  1996 Telecommunications
Act.  

Management  continues to  believe that  the FCC  should adopt  pure  price cap
regulation and eliminate the productivity factor, sharing and earnings cap.

CPUC Local Services Competition
-------------------------------

The  CPUC authorized  facilities-based  local services  competition  effective
January  1996 and  resale competition  effective March  1996.   Several issues
still need to be resolved in  order to implement competition in all California
telecommunications  markets.  Issues to  be finalized include  final rates for
resale  and  number portability,  LEC  provisioning and  pricing  of essential
network  functions to  competitors and  presubscription. The  CPUC expects  to
issue final rules on presubscription  in early 1997 and final rates  and rules
for all other issues in late 1997.

Management believes  that all markets should be  open to all competitors under
the  same rules at the same time, and that a truly open competitive market, in
which  the   Company  can  compete  without   restrictions,  offers  long-term
opportunity to build the business.














                                      22








                                    <PAGE>


CPUC Decision on Universal Service
----------------------------------

The  CPUC issued its final decision on  universal service on October 25, 1996,
establishing  an annual  California  universal service  fund of  approximately
$352 million.   Customers of all telecommunications  providers will contribute
to  the  preservation  of affordable  telephone  service  via  a 2.87  percent
surcharge on all bills for telecommunications services provided in California.
The  new program  will  go  into effect  February  1,  1997. Applications  for
rehearing are  due on December 4,  1996.  Management is  evaluating whether to
seek rehearing.  

Management  is concerned  that the  decision underestimates  the true  cost of
providing  universal telephone  service.   While  $305  million of  the  total
$352 million is expected to be paid to the Company, this is far short  of what
the Company estimates the true cost of providing universal service to be.  The
Company  developed a  Cost Proxy  Model to  calculate the  cost of  service in
California. That model estimated  the average cost of providing  service to be
$27 per line per month.  The CPUC uses the  model for the new program, but has
determined that the average cost is only $20.30 per line per month.

In  order to  ensure  revenue neutrality,  the Company  must offset  its rates
dollar for dollar  for any funds it receives from  the newly created universal
service  fund.   This offset  will initially  be accomplished  by means  of an
across-the-board  surcredit  on all  of  the Company's  products  and services
except for residential basic exchange services.

The final decision also establishes a discount program for schools, libraries,
certain   community-based  organizations   and  municipal-   and  county-owned
hospitals and clinics.  Carriers providing services at a discounted price will
be reimbursed from a newly created California Teleconnect Fund.  This discount
program will be funded by a separate surcharge of 0.41 percent on the bills of
customers of all telecommunications carriers in California.   

CPUC Regulatory Framework Review
--------------------------------

As previously reported,  in December  1995, the  CPUC issued an  order in  its
review of the  regulatory framework in California.  The order suspended use of
the "inflation minus productivity" component of the price cap formula for 1996
through  1998.  This  action freezes the  price caps on most  of the Company's
regulated services for the years 1996 through  1998 except for adjustments due
to exogenous  costs or price  changes approved through the  CPUC's application
process.   In October 1996, the Company filed  an application with the CPUC to
adjust its  rates due to exogenous  cost changes, proposing  an annual revenue
reduction of approximately $65 million effective January 1, 1997.  The CPUC is
expected to issue a decision before the end of 1996.









                                      23








                                    <PAGE>

 
PART II.  OTHER INFORMATION

Item 6.   Exhibits 

          (a)  Exhibits.

               Exhibits  identified as on  file with the  SEC are incorporated
               herein by reference as exhibits hereto.

Exhibit
Number                            Description
-------                           -----------

   4     No  instrument which  defines  the  rights of  holders  of long-  and
         intermediate-term debt of Pacific Bell  is filed herewith pursuant to
         Regulation S-K, Item 601(b)(4)(iii)(A).  Pursuant to this regulation,
         Pacific Bell hereby agrees  to furnish a copy of  any such instrument
         to the SEC upon request.

   15    Letter re unaudited interim financial information.

   27    Article 5 FDS for 3rd Quarter 1996 Form 10-Q.


The Company  will furnish  to a  security holder  upon request  a copy  of any
exhibit at cost.






























                                      24








                                    <PAGE>


FORM 10-Q





                                   SIGNATURE
                                   ---------

Pursuant  to the  requirements  of the  Securities Exchange  Act of  1934, the
registrant  has duly  caused this  report to  be signed on  its behalf  by the
undersigned thereunto duly authorized.





                               Pacific Bell



                               By: /s/Peter A. Darbee
                                   ---------------------------------------
                                   Peter A. Darbee
                                   Vice President, Chief Financial Officer
                                   and Controller



Date:  November 13, 1996


























                                      25








                                    <PAGE>


                                 EXHIBIT INDEX



Exhibits  identified  as on  file  with the  SEC  are  incorporated herein  by
reference as exhibits  hereto.  All other exhibits are provided as part of the
electronic transmission.

Exhibit
Number                                  Description
-------                                 -----------

   4      No  instrument which  defines the  rights  of holders  of long-  and
          intermediate-term debt of Pacific Bell is filed herewith pursuant to
          Regulation   S-K,  Item   601(b)(4)(iii)(A).     Pursuant   to  this
          regulation, Pacific Bell hereby agrees to furnish a copy of any such
          instrument to the SEC upon request.

   15     Letter re unaudited interim financial information.

   27     Article 5 FDS for 3rd Quarter 1996 Form 10-Q.



































                                      26