Pennsylvania Steps Away from Wholesale/Retail Split

HARRISBURG, Pa. -- Today's Pennsylvania Public Utility Commission ruling apparently rejects the concept of structural separation, Verizon officials said today.

"The commission recognized that dividing Verizon Pennsylvania into two separate entities -- one to sell wholesale services and one to sell retail services -- is unwarranted," said Daniel J. Whelan, president and CEO of Verizon Pennsylvania. "There are, however, a number of provisions that could be troublesome. The motion is a complex document, which we must closely review before commenting in detail."

Verizon argued vigorously before the agency and in state courts that the PUC's proposal to carve Verizon Pennsylvania into separate wholesale and retail companies would cost nearly $1 billion, increase phone prices and cast a pall of confusion over local telecommunications akin to the 1984 breakup of AT&T.

AT&T lobbied heavily in favor of cleaving Verizon Pennsylvania in two. In the end, Verizon was forced to respond to AT&T's advertising blitz, designed to keep Verizon out of the long-distance business and limit consumer choice in Pennsylvania.

Overwhelming evidence shows the presence of vibrant local telecommunications competition in the state during this 18-month legal and regulatory battle. Currently, more than 40,000 residential customers are switching each month from Verizon to other local phone companies. This represents a decline in residential lines of more than seven per cent from Verizon's peak levels in a year.

Whelan noted that Verizon customers, as well as employees and retirees, have supported the company throughout this battle and pointed to a new poll by Public Opinion Strategies showing that Pennsylvanians opposed structural separation by a 2-1 margin.

"The poll demonstrated that customers overwhelmingly are happy with the quality of service they receive from Verizon Pennsylvania," Whelan said. "They opposed the domino effect of confusion, rate changes and job losses structural separation would create."

Verizon Communications Inc. (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with nearly 109 million access line equivalents and more than 27.5 million wireless customers. Verizon is also the world's largest provider of print and online directory information. A Fortune 10 company with more than 260,000 employees and more than $63 billion in annual revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.


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