Verizon Asks Federal Court to Halt Bid Opening For Exclusive State Telecom Contract

CHARLESTON, W.Va. - Verizon Communications today asked the U.S. District Court in Charleston to halt a bid opening on a State of West Virginia contract for telecommunications that could tie the state to an exclusive contract with one telecommunications provider for up to 40 years.

In its filing, Verizon requested a temporary restraining order to stop bids from being opened Dec. 20 on a request for proposal (RFP) by the Governor's Technology Office. The RFP seeks bidders to offer free fiber-optic services to the State of West Virginia in exchange for exclusive access to rights-of-way along the state's highways.

"The issues raised by this proposal are critical to this state, its citizens and the telecommunications industry," said Gale Given, president of Verizon West Virginia. "We've asked the court stop the bid opening until all of us can determine if this project is legal."

Verizon presented the Governor's Technology Office a list of questions about the RFP at a Nov. 28 pre-bid meeting. Answers to many of the questions were necessary for Verizon to determine whether it could lawfully respond to the RFP, but the Governor's Technology Office did not respond.

Today, Verizon raised three issues in its court filing:
• As written, the RFP violates the federal Telecommunications Act of 1996, which specifically requires state governments to manage rights-of-way on a "competitively neutral and nondiscriminatory basis." However, under the terms of the RFP, the winning provider would have exclusive access to state rights-of-way for up to 40 years. "The goal of the federal law is to encourage the opening of all telecommunications markets to competition - not to let states give a single company exclusive access to rights-of-way," said Given.
• State agencies and their officials do not have the statutory authority to grant franchises to their favored providers. In particular, the West Virginia Legislature has not authorized the Governor's Technology Office, the Department of Transportation or the Parkways Authority to award an exclusive franchise to one provider, as offered under the terms of the RFP.
• The RFP does not specify that bidders must be telecommunications providers who are certified by the West Virginia Public Service Commission. Without such a requirement, the winning provider could gain a distinct competitive advantage over such telecommunications companies as Verizon, which operate under stringent federal and state rules for linking other carriers' networks.

"If allowed to proceed as is, this RFP will create a host of thorny problems for the State of West Virginia in the future," said Given. "That's why we're asking the court to step in and weigh these issues now."

Verizon Communications

Verizon Communications Inc. (NYSE:VZ), formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with more than 101 million access line equivalents and more than 26 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com .