"This final approval contains reasonable conditions that clear the way to unite these two great companies into Verizon Communications, which will be a world-class competitor able to bring innovative telecommunications services to customers across the country," said Lee. "We are on track to close the merger by the end of this month."
Ivan Seidenberg, chairman and chief executive officer of Bell Atlantic and designated president and co-CEO of the new company, said, "The FCC recognizes that this merger uniquely combines complementary assets that will generate enormous public interest benefits. We look forward to creating the next great brand in communications, one that will set the standard for global communications companies."
The FCC adopted the conditions proposed by the two companies that further assure that the merger is both pro-competitive and pro-consumer. The proposal addresses two issues, one concerning long distance and Genuity - GTE's internetworking group - and the second involving a variety of pro-competitive conditions.
The companies agreed that Genuity, which operates a tier-one Internet backbone and related data businesses, would sell 90.5 percent of its equity to the public through an initial public offering (IPO). Verizon will retain a 9.5 percent equity interest in Genuity, as permitted by the Telecommunications Act of 1996. Verizon also will have an option to increase its ownership interest to as much as 80 percent if it gains long distance entry in all Bell Atlantic states within five years. Until then, Verizon will be able to enter into joint marketing agreements with Genuity in states where Verizon can offer long-distance. The IPO will be completed before the companies complete the merger.
Seidenberg and Lee said they are confident in the new company's ability to secure long distance approval in the Bell Atlantic states within the time required to regain control of Genuity, and noted that Bell Atlantic is the first former regional Bell to win approval to offer long distance in one of its states, New York.
The FCC conditions include commitments proposed by Bell Atlantic and GTE to further promote both competition and the widespread deployment of advanced services while helping to ensure that consumers continue to receive high-quality, low-cost telephone services. These conditions are similar to those that the FCC adopted in approving the SBC-Ameritech merger, but reflect the differences between that merger and this one.
A second press release from the companies today outlines their chairmen's vision for the new company. This release, along with other information about the merger, including domestic and international maps, can be found on the Internet web sites www.ba.com and www.gte.com.