Bell Atlantic Urges State Supreme Court to Set Aside, Quickly Resolve Issues in PUC Telecom Order

Bell Atlantic Urges State Supreme Court to
Set Aside,
Quickly Resolve Issues in PUC Telecom
Order

Company Seeks Correction of 'Radical' Commission Action

October 21, 1999

PHILADELPHIA -- Bell Atlantic today sought the help of the courts to
reverse a Public Utility Commission (PUC) ruling that violates the
company's legal rights, unilaterally breaks existing agreements between
the state and the company, and amounts to an abuse of power by the
PUC.

Bell Atlantic appealed directly to the Pennsylvania Supreme Court under
a procedure, known as a "King's Bench Review," which
usually is reserved for matters of particular interest to the state and its
citizens. In its filing, Bell Atlantic asked the court to accept jurisdiction
over the appeal and to stay the PUC order while the appeal is pending.

"The issues involved in this case are critical to the future of
Pennsylvania and will affect every citizen and business in the
Commonwealth," said Daniel J. Whelan, president and CEO of Bell
Atlantic - Pennsylvania. "Bell Atlantic wants to resolve these
issues quickly and decisively, and I believe the PUC wants to do the
same. We hope all parties share that goal and join with us in asking the
Supreme Court to assume jurisdiction of the appeal to resolve the issues
as promptly as possible."

In its court filing, Bell Atlantic stated that the Commission's Sept. 30
global telecommunications order would unlawfully tear the company's
Pennsylvania operations into two; guarantee profits for competitors at the
expense of Bell Atlantic, its customers and shareholders; and impose
new, unjustified regulatory burdens and fees. As a result, the order will
delay true telecommunications competition for Pennsylvanians and could
result in higher costs and poorer service for thousands of customers
across the state.

"The Commission's global order is bad for Pennsylvania, and today
we're taking the necessary steps to correct it," said Whelan.
"However well-intentioned, this radical action must not stand. It
retards, rather than hastens, local residential phone competition. It's
fundamentally unfair to one of the state's largest capital investors and
employers, and it will harm consumers, businesses and economic
development.

"By asking the Supreme Court to 'reach down' and resolve these
issues, we'll get to closure, certainty and fairness more quickly,"
said Whelan. "Pennsylvania and the companies and consumers
living and doing business here deserve a speedy, fair and balanced
resolution. And that's what we're trying to accomplish."

In its filing, Bell Atlantic cited a number of deficiencies in the
Commission's global order, including:

• Violation of a 1994 alternative regulatory plan agreed to
  by the PUC and the company under Chapter 30 of the Public
  Utility Code. Under the alternative regulatory plan, Bell
  Atlantic agreed to aggressive network modernization
  commitments and price caps for many services in exchange
  for earnings flexibility. "In requiring involuntary rate
  reductions, rates for services set below what it costs Bell
  Atlantic to provide them, rate-cap extensions and expansion of
  programs such as Lifeline, the Commission violated the 10-
  year plan in mid-term," said Whelan.

• An unprecedented abuse of power by the PUC in directing
  Bell Atlantic to split its Pennsylvania operations into two
  separate subsidiaries. "This attempt to dismember a
  private corporation far exceeds the Commission's statutory
  powers under the Public Utility Code or any other applicable
  law," said Whelan. In addition, the Commission has
  imposed a punitive sanction on Bell Atlantic alone in
  Pennsylvania, not for past violations of law, but in anticipation
  of anticompetitive conduct that the PUC speculates might
  occur in the future.

• Violation of Bell Atlantic's due-process rights under
  Pennsylvania law, as well as the Pennsylvania and U.S.
  constitutions. In establishing the "global"
  negotiation process last year, the Commission issued a stay on
  a number of pending telecommunications issues. Each of the
  negotiating parties retained the legal right to litigate these
  issues if no settlement was reached. And no global settlement
  was reached. "Indeed, the Commission imposed a
  number of requirements on Bell Atlantic against our
  will," said Whelan. "In doing so, the PUC
  breached our legal rights.

"Although its intentions in the global process were good, the
Commission has erred critically," said Whelan. "The PUC
cannot adopt the unlawful requirements proposed by our competitors, led
by AT&T and MCI WorldCom. These companies have their own narrow
interests -- to keep Bell Atlantic tied up in regulatory red tape and unable
to compete with them in the long-distance market.

"And Pennsylvanians are the chief victims of this regulatory game-
playing by our competitors.

"We want to right this wrong quickly so we can move the battle
from the courtroom to the marketplace," said Whelan. "We
are committed to take the course of action that's best for consumers and
the future of Pennsylvania's business climate, as well as our 19,000
employees, 7,000 retirees and 85,000 shareowners in the state."

Bell Atlantic is at the forefront of the new communications and
information industry. With more than 43 million telephone access lines
and nearly 10 million wireless customers worldwide, Bell Atlantic
companies are premier providers of advanced wireline voice and data
services, market leaders in wireless services and the world's largest
publishers of directory information. Bell Atlantic companies are also
among the world's largest investors in high-growth global
communications markets, with operations and investments in 23
countries.