Bell Atlantic, GTE Detail Merger Benefits for Virginia SCC
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Bell Atlantic, GTE Detail Merger Benefits for
Companies Promise Savings, Stepped-Up Deployment of New
May 28, 1999
Paul Miller, Bell Atantic
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
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
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 -
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).