Bell Atlantic, GTE Reaffirm Merger's Benefits

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Bell Atlantic, GTE Reaffirm Merger's Benefits
To Pennsylvanians -- Savings, New Services

Companies Respond to PUC Judge's Recommendation,
Which 'Completely Discounted' Input of State's Attorney

October 18, 1999


For Bell Atlantic:
Sharon Shaffer,
215-963-6200 or 412-633-5574
Harry Mitchell,
For GTE:
Sara Vuick,
Lee Gierczynski,

HARRISBURG, Pa. -- Pennsylvanians will see lower prices, new services and
continued high network investment once Bell Atlantic Corp. and GTE Corp.
complete their merger.

The companies today reaffirmed these and other benefits in a filing that refutes a
Sept. 30 recommended decision from an administrative law judge of the
Pennsylvania Public Utility Commission (PUC).

The short, unsubstantiated recommendation completely failed to acknowledge
the numerous and substantial benefits of the merger, according to the companies.
The decision also "misconstrues the legal standards governing merger
review," the filing stated.

"The recommendation ignored undisputed evidence demonstrating the
benefits of this merger to Pennsylvanians -- benefits that neither company could
achieve by itself," said John O. Dudley, assistant vice president-regulatory
and government affairs for GTE North. "The Pennsylvania customers of
Bell Atlantic and GTE -- and the Commonwealth as a whole -- will be distinctly
better off with this merger than without it. The recommendation inexplicably
failed to justify depriving Pennsylvania of these benefits."

"A strong record of support for this merger and its benefits was built
during eight months of public input hearings and voluminous testimony from our
companies and citizens throughout Pennsylvania," said Daniel J. Whelan,
president and CEO of Bell Atlantic - Pennsylvania. "In addition, Bell
Atlantic and GTE agreed to substantial, specific financial and service
commitments in a memorandum of understanding with Attorney General A.
Michael Fisher."

With these commitments, the attorney general agreed that the merger is in the
public interest and rejected the self-serving claims of AT&T and other
competitors to the contrary.

"The judge completely discounted this significant finding by the attorney
general -- who is charged with enforcing the Commonwealth's antitrust laws -- as
well as approval from the U.S. Department of Justice in drawing his erroneous
conclusions about the competitiveness and public interest of our merger,"
said Whelan.

The memorandum of understanding with the attorney general commits the
companies to provide a number of benefits for Pennsylvania, including:

  • 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 charge for Touch-Calling service. Within three
    months of merger completion, 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 merger
    completion, GTE North will lower basic service rates in certain rural
    portions of Pennsylvania to Bell Atlantic's level in comparable areas,
    saving these customers approximately $5 million a year.

  • Accelerating new services for GTE customers. Within 30 months
    after completion 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 customers
    about how the merger will affect them, how the services they receive
    and prices they pay will change, and how they will remain the same.

  • 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.

To date, both companies' shareholders, 31 state regulatory commissions and the
U.S. Department of Justice have either approved the merger or declined to assert
jurisdiction over it. The merger also has won the support of 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

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
( or at GTE's homepage (

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