05.28.1999|Corporate

Bell Atlantic, GTE Detail Merger Benefits for Virginia SCC

Bell Atlantic, GTE Detail Merger Benefits for Virginia SCC

Companies Promise Savings, Stepped-Up Deployment of New Services

May 28, 1999

Media contact: Paul Miller, Bell Atantic
804-772-1460
Lacy Yeatts, GTE
804-779-4097

RICHMOND, Va. -- Bell Atlantic and GTE today provided the State Corporation Commission (SCC) with a comprehensive list of benefits that their 3.5 million Virginia customers will realize when the two companies merge.

The announcement was part of a 22-page joint petition seeking a green light from the Virginia regulators to merge the two parent companies. The operating telephone subsidiaries in the state, Bell Atlantic - Virginia and GTE South, will continue to operate as separate companies, although the merger will benefit their customers upon its completion. The petition was accompanied by hundreds of pages of testimony from a dozen witnesses.

The benefits of the merger include a cap on basic service rates for Bell Atlantic - Virginia customers that would extend through 2003. "Bell Atlantic's Virginia customers will be delighted to learn that the rates they pay for their basic services will not increase for at least four-and-half years," said Hugh Stallard, president and CEO of Bell Atlantic - Virginia.

Bell Atlantic's basic service prices are currently capped through the year 2000. Under today's commitment, the cap would be extended for an additional three years. By the time this new cap expires, Bell Atlantic - Virginia's prices, regulated by the SCC, for basic services will not have increased for 20 years.

Jim Diaz, president of GTE South, said his company plans to accelerate the deployment of a number of new services to GTE's customers. "Within 18 to 24 months of the consummation of the merger, all GTE South customers will have access to services like Caller ID, Automatic Call Return and Automatic Busy Redial," he said. These services are already available to all Bell Atlantic - Virginia customers.

Diaz also said GTE would reduce rates for its customers in southwest Virginia, bringing them in line with prices other GTE customers in the state pay. This, too, would be contingent on the completion of the merger.

Bell Atlantic - Virginia and GTE South also committed to invest a minimum of $1.75 billion over three years following the merger in the state's telecommunications infrastructure.

Also in today's filing, the two companies reiterated an earlier promise that they would begin to significantly expand local calling areas throughout Virginia once the parent company merger is complete. That move would eliminate 367 long distance routes within Virginia and reduce revenues of both companies by $22 to $23 million a year.

Bell Atlantic and GTE petitioned the SCC last December for approval of their merger. On March 31, the commission dismissed the petition "without prejudice," leaving the door open for both companies to file a revised petition.

"The judges made it clear they wanted conclusive evidence that this merger will benefit Virginians," Diaz said. "Well, the evidence is in. There should now be no question that this merger is a win for all of our customers."

The U.S. Department of Justice and shareholders of the two companies recently approved the merger. In addition, 27 state public utility commissions have either approved the merger or declined to assert jurisdiction over it.

Bell Atlantic - Virginia serves 3.5 million telephone access lines in roughly one-third of the state's geography. GTE, Virginia's second largest local telephone company, serves more than 750,000 access lines.

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

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