Bell Atlantic-GTE Merger Faces Opposition from Interexchange and Competitive Local Exchange Carriers

A proposed merger between Bell Atlantic Corp. and GTE Corp. has sparked debate over whether the deal would create a monopoly in the local exchange service market. Interexchange carriers and competitive local exchange carriers expressed concerns that the merger would violate the statutory restrictions on Bell companies providing in-region interLATA services. They argue that the only way to remedy the problem is to force GTE to divest long distance interests. However, business, labor, and consumer interests have given the deal their support, citing job creation and new services as potential benefits. The FCC is currently studying the proposed transfer of control of GTE's licenses and authorizations to Bell Atlantic in Common Carrier docket 98-184.

Key Takeaways:

• Interexchange carriers and competitive local exchange carriers argue that the merger would create a monopoly in the local exchange service market, violating statutory restrictions on Bell companies providing in-region interLATA services.
• The FCC is studying the proposed transfer of control of GTE's licenses and authorizations to Bell Atlantic in Common Carrier docket 98-184.
• Business, labor, and consumer interests support the deal, citing job creation and new services as potential benefits.
• Cablevision Lightpath noted that the concept of "transitional relief" allowing Bell Atlantic to continue offering interLATA services to GTE customers is "unprecedented and contrary to the Telecommunications Act."
• Triton PCS Inc. asked the FCC to condition approval of the proposed merger on a "best practices" requirement for intercarrier roaming agreements.
• The Texas Public Utility Commission suggested that market-opening conditions similar to those included in the Bell Atlantic-NYNEX merger should be applied to Bell Atlantic-GTE.
• The FCC should require GTE's telco in Texas to improve its service quality as a precondition of the merger.
• GTE has one of the worst customer complaint records of any local telephone company in the Texas commission's jurisdiction.
• The Commonwealth of the Northern Mariana Islands recommended that Bell Atlantic and GTE agree to maintain fully integrated rates across all affiliated companies covering all services, including CMRS.
• The Communications Workers of America represents about 72,000 Bell Atlantic employees and 25,000 employees at GTE and supports the merger.
• Wall Street's Bear, Stearns & Co. said the merged company would provide a "broader array of products and services."
• EMC Corp. stated that the merger would provide a "higher level of competent technical offerings, competitive pricing, and integrated solutions" for the company.
• The Competitive Enterprise Institute said that the merger wouldn't harm consumers or the public interest.
• The National Consumers League noted the commendable record of both companies in serving consumer rights and combating telecommunications and Internet fraud.
• The Alliance for Public Technology said the merger would promote the deployment of broadband services.

Statistics:

• 72,000: Number of Bell Atlantic employees represented by the Communications Workers of America.
• 25,000: Number of GTE employees represented by the Communications Workers of America.
• 21: Number of markets Bell Atlantic has pledged to enter as a competitive local exchange carrier within 18 months of closing the merger.
• 18 months: Timeframe for Bell Atlantic to enter the 21 markets as a competitive local exchange carrier.

Sources:

• FCC Common Carrier docket 98-184
• Section 271 of the Telecommunications Act of 1996
• Cablevision Lightpath, Inc.
• Triton PCS, Inc.
• Texas Public Utility Commission
• Commonwealth of the Northern Mariana Islands
• Communications Workers of America
• Wall Street's Bear, Stearns & Co.
• EMC Corp.
• The Competitive Enterprise Institute
• The National Consumers League
• The Alliance for Public Technology