Bell Atlantic, GTE Applaud PUC Merger Approval

Bell Atlantic, GTE Applaud PUC Merger Approval

Commission Makes Right Call for Pennsylvanians; Companies Commit
to Customer Savings, Investment, New Services

November 4, 1999


For Bell Atlantic:

Harry Mitchell,
Office: 304-344-7562
Pager: 800-946-4646 PIN 1460309

Sharon Shaffer,
215-963-6200 or 412-633-5574
For GTE:

Sara Vuick,

Lee Gierczynski,
215-963-6200 or 412-633-5574

HARRISBURG, Pa. -- Bell Atlantic and GTE today announced they are
pleased with the Pennsylvania Public Utility Commission's approval of
their merger, promising that their customers would benefit from price
reductions, new services and substantial network investment.

"The Public Utility Commission has made the right call for
Pennsylvanians with this decision," said Daniel J. Whelan, president and
CEO of Bell Atlantic - Pennsylvania. "We look forward to completing our
merger and moving forward as stronger Pennsylvania companies to bring a
full menu of the very finest telecommunications services to consumers and
businesses throughout the Commonwealth."

"The record is clear from nine months of public hearings and voluminous
testimony from our companies and citizens throughout the Commonwealth
-- this merger will bring numerous benefits to Pennsylvania's consumers
and businesses that neither company could provide on its own," said John
O. Dudley, assistant vice president-regulatory and government affairs for
GTE North.

During the merger review process, Bell Atlantic and GTE signed a
memorandum of understanding (MOU) with Pennsylvania Attorney
General D. Michael Fisher in which the companies agreed to substantial,
specific financial and service commitments. Based on these commitments,
the attorney general agreed that the merger is in the public interest.

"Attorney General Fisher should be commended for recognizing the
obvious benefits of this merger and playing a key role in developing a
unique set of commitments that benefit Pennsylvania consumers," said

In its Opinion and Order, the Commission noted that "the MOU and
reporting requirements support approving this merger because it provides
substantial public benefits and mitigates any potential public harm and
anti-competitive effects of the merger."

The commitments include:

  • Capping rates through 2003. When the merger is completed,
    Bell Atlantic will extend its cap on rates for basic service in
    Pennsylvania through the year 2003. By the time the cap expires,
    Bell Atlantic prices for basic phone service will not have increased
    for almost 20 years. GTE North residential customers' basic local
    service rates also will be capped through 2003.

  • Eliminating GTE's charge for Touch-Calling service. Within
    three months of completing the merger, GTE North will file a tariff
    to eliminate this charge, saving its customers nearly $10 million a
    year. Bell Atlantic's Pennsylvania customers do not pay a separate
    charge for Touch-Tone service.

  • Cutting GTE rates in rural Pennsylvania. Within two years of
    the merger, GTE North will lower basic service rates in certain
    rural portions of Pennsylvania to the level of Bell Atlantic's rates in
    comparable areas, saving these customers approximately $5
    million a year.

  • Accelerating new services for GTE customers. Within 30
    months of the merger, all GTE North customers in Pennsylvania
    will have access to such services as Caller ID, Automatic Call
    Return and Automatic Busy Redial.

  • Continuing high levels of network investment. Bell Atlantic
    will invest approximately $2.3 billion and GTE approximately
    $210 million in Pennsylvania from the years 2000 through 2002 to
    improve their telecommunications infrastructure. This will help
    expand the availability of the latest technologies and services in
    rural, suburban and urban areas of the state.

  • Keeping customers informed. Both companies will inform their
    customers about how the merger will affect them.

  • Reducing access charges, unbundled loop rates. The companies
    will substantially decrease the prices companies pay them to
    complete calls over Bell Atlantic's and GTE's networks, as well as
    the prices companies pay Bell Atlantic and GTE to lease parts of
    their networks to provide competing local service.

"These commitments will result in near-term savings, accelerated rollout
of new services for many customers and significant network investment in
addition to the longer-term benefits our merger will bring to
Pennsylvanians," said Whelan.

This latest approval leaves only six states reviewing the merger, along
with the Federal Communications Commission. The U.S. Department of
Justice has given its clearance, as have shareholders of the two companies.
The merger also has received endorsements from the AFL-CIO, the
Communications Workers of America, the International Brotherhood of
Electrical Workers, the League of United Latin American Citizens,
Rainbow/PUSH Coalition, the Organization of Chinese-Americans, and
dozens of business and community leaders from areas served by Bell
Atlantic and GTE.

Bell Atlantic serves 6.5 million telephone access lines in roughly 40
percent of Pennsylvania's geography, and GTE serves more than 650,000
access lines in the Commonwealth. The companies together employ more
than 21,000 people in Pennsylvania.

Bell Atlantic and GTE announced in July 1998 that they planned a merger
of equals. More information is available at Bell Atlantic's News Center on
the World Wide Web (http://www.ba.com) or at GTE's homepage