Press Release

    "Customers will benefit because basic local rates will be capped for the next four years and service will be improved, particularly for customers in rural areas," said PUC Chairman John M. Quain. "At the same time, the merger will encourage competition among local providers because the companies will make it easier for competitors to use their equipment."

    Today's order adopts the memorandum of understanding reached in July between the two companies and the antitrust division of the state Attorney General's office. It also imposes additional reporting requirements on Bell Atlantic and GTE. Attorney General Mike Fisher recommended that the PUC approve the merger.

    Under today's order, the companies will cap rates for basic local service until Dec. 31, 2003. GTE will also reduce its rates over the next two years to match Bell's, resulting in approximately $5 million in savings per year. In addition, GTE has agreed to eliminate the cost of touch-tone service and reduce the cost of other non-basic services for savings of nearly $10 million. All GTE customers will be able to take advantage of standard calling features like caller ID, call waiting and call trace within 30 months.

    The merger will benefit Bell Atlantic residential and business customers by enabling them to take advantage of GTE's data network, considered one of the industry's most sophisticated. The two companies will also invest a minimum of $2.5 billion over the next three years in the state's telecommunications infrastructure. Bell will spend approximately $2.3 billion and GTE about $210 million to expand and modernize their networks.

    Today's agreement imposes several reporting requirements on Bell Atlantic and GTE. The companies must submit an annual report to the PUC detailing its capital expenditures by county for the preceding year. The report must include the amount of capital expenditures; the number of broadband and high speed Internet access lines; and the number of customers who have access to the services.

    Bell Atlantic and GTE must also report any changes in employee levels or changes to their reorganization plans every six months for three years following the consummation of the merger. Savings achieved through the merger must also be reported on the same schedule.

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