Regulators grant Bell Atlantic-Washington pricing flexibility, telephone customers to pay lower basic rates

Company to give $4 million to connect public schools to information superhighway

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WASHINGTON, D.C. -- The District of Columbia Public Service Commission today made basic telephone service more affordable, while liberating Bell Atlantic - Washington from outmoded regulation in favor of new rules that cap the company's prices rather than its earnings. The change represents one more step toward creating telecommunications competition in Washington.

Bell Atlantic will eliminate the cost for Touch-Tone service and reduce rates for basic residential and business dial-tone services. These reductions will result in $25.8 million in savings for Bell Atlantic's customers over a four-year period. Bell Atlantic also volunteered to contribute $4 million to a new Infrastructure Trust Fund to pay for computers, network wiring and other equipment so that students in all of the District's 165 public schools will have access to the Internet.

"The order is a fair compromise," said William Freeman, president and CEO, Bell Atlantic - Washington. "It's a win for consumers because they will receive lower rates; it's a win for the city because we will connect D.C. public schools to the Internet; and it's a win for Bell Atlantic because we will receive the pricing flexibility we need in a competitive marketplace."

Bell Atlantic will have three categories of services under the new plan: basic, discretionary and competitive. The company will reduce and cap rates for residential and business dial-tone service. Bell Atlantic can adjust prices for discretionary services like Call Waiting and Caller ID based on formulas established by the order. On competitive services such as Centrex and high-speed data services also provided by Bell Atlantic's competitors, the company now has the flexibility to raise and lower rates quickly.

"We now have the regulatory cornerstone in place to set prices as quickly as our competition," said Freeman. "This plan puts us on equal footing with powerful companies that plan to offer local telephone service in Washington, but it also affords us the opportunity to give back to our customers and to our community."

Bell Atlantic Corporation (NYSE: BEL) is at the forefront of the new communications, entertainment and information industry. In the mid-Atlantic region, the company is the premier provider of local telecommunications and advanced services. Globally, it is one of the largest investors in the high-growth wireless communication marketplace. Bell Atlantic also owns a substantial interest in Telecom Corporation of New Zealand and is actively developing high-growth national and international business opportunities in all phases of the industry.

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