Bell Atlantic, GTE Respond to Anti-Merger Testimony Filed with Pennsylvania PUC

Bell Atlantic, GTE Respond to Anti-Merger Testimony
Filed with Pennsylvania PUC

April 7, 1999

BACKGROUND -- Two consultants yesterday submitted testimony to the
Pennsylvania Public Utility Commission (PUC) claiming that the
proposed merger of Bell Atlantic and GTE is not in the public interest and
should not be allowed. The following response may be attributed to
Daniel J. Whelan, president and CEO of Bell Atlantic - Pennsylvania, and
John O. Dudley, assistant vice president-regulatory and government
affairs of GTE North:

We disagree with the consultants' testimony in a number of areas, and
we'll respond to their claims in detail in the appropriate forum as the
PUC's consideration of our companies' merger proceeds.

The merger of Bell Atlantic and GTE will benefit all our customers,
including Pennsylvanians, in a number of ways:

• It will provide a strong competitor to the Big Three
  communications giants -- AT&T-TCI-TCG, MCI WorldCom-
  UUNet and Sprint-Duetsche Telekom-France Telecom -- for
  Pennsylvanians' communications services, from local and long
  distance to Internet, wireless, high-speed data and other services.

• It will allow the merged company to bring new, advanced
  communications services to Pennsylvanians quicker and more
  efficiently.

• It will stimulate the regional economy generally and be good for
  employment in Pennsylvania.

Two of the consultants' main contentions are flat-out wrong and will
benefit no one but our competitors, who have much to gain from any delay
or obstacles that arise in the merger approval process.

First, our merger will increase competition, not hamper it. Currently,
more than 125 companies have asked to compete with Bell Atlantic in
Pennsylvania. Many of them already are. A merged Bell Atlantic-GTE
actually will provide the incentive the Big Three apparently needs to start
competing for Pennsylvanians' local phone service.

Second, separating the merged company's wholesale and retail operations
is unnecessary and discriminatory. This very issue was debated and
rejected as Congress crafted the Telecommunications Act of 1996. The
act contains a 14-point checklist that requires companies such as Bell
Atlantic to provide wholesale services in non-discriminatory fashion to
their own operations and competing companies. This separation
requirement is yet another boulder being thrown in the road by our
competitors, who want to delay our entry into long distance for as long as
possible.

Lastly, the consultants incorrectly characterized last week's action by the
Virginia State Corporation Commission (SCC) on Bell Atlantic's and
GTE's joint application. The SCC dismissed that application "without
prejudice" and gave the companies the opportunity to refile it with more
information. It did not make a decision on the merits of the merger. We
plan to refile our application as soon as possible, and we remain confident
that we'll gain the SCC's approval.