Verizon Reaches Agreement with State Senator To Hasten Full Telecom Competition in Pennsylvania

HARRISBURG, Pa. -- Verizon Communications and Sen. Vincent J. Fumo have reached an agreement that will move full telecommunications

competition out of the courtroom and into the marketplace more quickly.

The agreement with Sen. Vincent J. Fumo outlines a number of commitments to ensure Verizon treats competitors on a par with the way it treats its own

operations. Verizon also would face increased penalties for failing to provide competitors with service parity.

In exchange for these commitments by Verizon, Sen. Fumo now will support settlement of a Pennsylvania Public Utility Commission (PUC) proceeding that is

exploring whether and how to require the separation of the former Bell Atlantic - Pennsylvania into separate companies. Verizon and the senator today asked

the PUC to stay its structural separation proceeding while it considers the proposal.

Under the proposal, Sen. Fumo will agree to back Verizon's proposal to create a separate affiliate for advanced communications services as the company

already has done in New York. The legislator formerly had supported a PUC-imposed split of the company's operations into two fully separate companies -

one to serve wholesale customers and another for retail customers.

In addition, Sen. Fumo will support the basic components of a January proposal from Verizon and a dozen other competitors and consumer groups. This

proposal to the PUC sought to accelerate telecommunications competition in the commonwealth and avoid protracted litigation on a variety of

telecommunications issues. The January proposal included lower rates for competitors, among other benefits.

Sen. Fumo also will support Verizon's entry into the Pennsylvania long-distance market.

"This agreement will advance competition in Pennsylvania by averting years of litigation over an unnecessary, unwarranted split of our company,"

said Daniel J. Whelan, president of Verizon Pennsylvania. "It also will bring stability to the state's telecommunications marketplace - a marketplace that

has grown significantly over the past year and is set to explode in coming months."

Under the agreement between Verizon and Sen. Fumo:

* Verizon will follow a strict code of conduct governing the relationship among the company's various subsidiaries and operations.

* Verizon will increase the amount of damages it pays under the PUC's performance assurance plan, which measures the service quality the former Bell Atlantic

- Pennsylvania provides competing local phone companies. Verizon will continue to pay competing companies $2,000 per measure for violations lasting longer

than 30 but less than 60 days and $4,000 per measure for violations lasting longer than 60 days.

* Verizon will pay an additional $1,000 per measure missed, increasing the total paid per violation to $3,000 and $5,000, respectively. These additional

damages will form the basis for a Telecommunications Economic Development Fund designed to aid development of high-speed communications and

competition in Pennsylvania. A four-person, bipartisan committee will administer and disburse grants from the fund.

* Verizon will include an insert in its former Bell Atlantic customers' bills six times over the 18 months following the PUC's adoption of the settlement. This insert

will inform customers of their ability to choose an alternative local phone company and refer them to a toll-free number and Web site for the PUC that they can

access for more information.

Adoption of the agreement by the PUC will resolve all litigation involving Verizon and Sen. Fumo.

Verizon Communications Inc. (NYSE:VZ), formed by the merger of Bell Atlantic and GTE, 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 more than 101 million access line equivalents and

more than 26 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 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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