BAN Banco Lat.8%Pfd

RNS Number:5776E
Bell Atlantic Corp
27 January 2000



CONTACT:                                  John Killian (212) 395-1152
                                          Bell Atlantic
                                          George Lieb  (972) 507-2462
                                          GTE

                 Bell Atlantic and GTE File Formal Proposal with
                        Federal Communications Commission

         Proposal Outlines Changes for GTE Internetworking Structure and
                      Defines Voluntary Merger Commitments

WASHINGTON -- Bell Atlantic and GTE today filed with the FCC a proposal to meet
the public interest test and complete the companies' merger.

"The merger of Bell Atlantic and GTE is vastly different from other recent
mergers, it is neither a horizontal merger between actual competitors nor a
lateral merger of adjacent regional Bell companies. It is a unique combination
of complementary assets that will generate enormous public interest benefits,"
said William P. Barr, executive vice president and general counsel of GTE. "The
combined company's long distance, wireless and data capabilities across Bell
Atlantic's territories and GTE's national footprint promise a strong competitor
that will be able to offer innovative service packages to satisfy customer
needs."


In the filing the companies outlined how they will restructure the GTE
Internetworking business and proposed a set of comprehensive commitments to
facilitate prompt approval of their merger. (See enclosed summary of the
filing.)

Under the proposal, the Internet backbone and related data business of GTE
Internetworking would be transferred to a corporation that is owned and
controlled by third party public shareholders and operated independently of the
merged Bell Atlantic-GTE. The merged company will retain only the ten percent
equity interest expressly permitted by the Telecommunications Act of 1996, and
an option to increase its ownership interest to a controlling level once it
receives sufficient interLATA relief to operate the business. This option will
be exercisable within five years of closing the merger.

The companies' filing also included a comprehensive package of commitments that
will further promote the widespread deployment of advanced services, promote
competition, and help ensure that consumers continue to receive high-quality,
low-cost telephone services. These commitments are patterned closely after those
that the FCC adopted in approving the SBC-Ameritech merger, subject to
modification where appropriate to reflect the differences between that merger
and this one.

As part of these commitments, the companies propose to invest $500 million
outside their traditional local service territories over three years after
merger closing.

"We will fulfill this commitment," Barr said, "by applying the latest technology
to meet the needs of the market."

These expenditures will go toward providing services that compete with
traditional telephone services offered by incumbent local exchange carriers, or
to provide advanced services to mass market customers. The companies also said
GTE would end its mandatory minimum charge on long distance calls once AT&T does
the same.

"The merger of Bell Atlantic and GTE will produce enormous benefits and readily
satisfies the FCC's public interest standard. We look forward to working with
the Commission to bring this matter to a satisfying solution," said Tom Tauke,
senior vice president for Government Relations at Bell Atlantic. "Under this
proposal the ownership and control of GTE Internetworking will be transferred to
new shareholders through an initial public offering. This addresses the long
distance issue in a way that lives up to both the letter and the intent of the
1996 Telecommunications Act. It will allow us to comply with the ten
percentownership restrictions, but still provides a path to increase our
interest once we have achieved sufficient interLATA relief."

The FCC is expected to put the companies' proposal out for formal comment. The
companies are still targeting to close the merger around the end of the first
quarter or early in the second.

Bell Atlantic is at the forefront of the new communications and information
industry. With nearly 44 million telephone access lines and 12 million wireless
customers worldwide, Bell Atlantic companies are premier providers of advanced
wireline voice and data services, market leaders in wireless services and the
world's largest publishers of directory information. Bell Atlantic companies are
also among the world's largest investors in high-growth global communications
markets, with operations and investments in 23 countries.

GTE: With 1998 revenues of more than $25 billion, GTE is a leading
telecommunications provider with one of the industry's broadest arrays of
products and services. In the United States, GTE provides local service in 28
states and wireless service in 18 states, as well as nationwide long-distance,
directory, and internetworking services ranging from dial-up Internet access for
residential and small-business consumers to Web-based applications for Fortune
500 companies. Outside the United States, the company serves customers on five
continents. Additional information about GTE can be obtained at
http://www.gte.com.

                                EXECUTIVE SUMMARY
   
Bell Atlantic and GTE today filed a comprehensive proposal with the Federal
Communications Commission (FCC) to resolve the issues raised in connection with
their proposed merger.

Today's filing consists of two major parts:

- A proposal to transfer the Internet backbone and related assets of GTE
  Internetworking to a corporation that will be owned and controlled by third   
 party public shareholders and will operate independently of the merged Bell    
Atlantic-GTE. At issue are the long distance and Internet-related service      
offerings that GTE provides to consumers and businesses within the 13 in-      
region states and District of Columbia served by Bell Atlantic.

Under this proposal, the merged company will receive only the ten percent
equity interest expressly permitted by the Telecommunications Act of 1996, and
an option to increase its ownership interest to a controlling level (i.e., 80
percent) once it receives sufficient interLATA relief to operate the business.
This option will only be exercisable within five years from the closing of the
merger. To ensure that the merged company is in full compliance with all the
requirements of section 271, GTE will also exit certain businesses that are
prohibited to Bell Atlantic, including voice long distance within Bell
Atlantic's non-271-approved states.

- A comprehensive package of commitments that will further promote the          
 widespread deployment of advanced services, promote competition, and help to   
ensure that consumers continue to receive high-quality, low-cost telephone     
services. These commitments are patterned closely after those that the FCC     
adopted in approving the SBC-Ameritech merger, subject to modification where   
appropriate to reflect the material differences between that merger and this   
one. The commitments include:

  -  Establishing a separate affiliate to provide advanced data services;

  -  Providing competing carriers with access to uniform interfaces for
     obtaining access to operations support systems within each of the          
    companies' respective service areas;

  -  Establishing specific carrier-to-carrier performance plans (Including both
     measurements and incentive payments);

  -  Extending the terms of post-merger negotiated interconnection agreements   
    to competing carriers operating anywhere in Bell Atlantic or GTE serving    
   territory;

  -  Deploying advanced data services to low income urban and rural areas;

  -  Establishing enhanced Lifeline plans; and

  -  Establishing specific compliance and enforcement mechanisms to ensure that
     the commitments are adhered to fully following completion of the merger.

As part of these commitments, the companies also propose to spend a minimum of
$500 million outside of their traditional local service territories within three
years of merger closing. These expenditures will go toward providing services
that compete with traditional telephone services offered by incumbent local
exchange carriers or to provide advanced services to mass market customers. The
companies also said GTE would end its mandatory minimum charge on long distance
calls, as soon as AT&T does the same.

The companies reiterated the strong public interest benefits of their proposed
merger in today's filing, noting that the Department of Justice and all but two
of the state regulatory commissions whose approval is needed already have
approved the merger. "By creating a truly national competitor with the reach and
mix of services necessary to take on AT&T/TCI/Media One, MCI-WorldCom and
Sprint, the merger of Bell Atlantic and GTE will generate enormous benefits for
the Internet, long distance, wireless, local and national bundled services
markets," the companies said in their filing.

The companies go on to point out that their merger is different in fundamental
respects from other recent mergers. It is not a merger of actual competitors
like MCI and WorldCom. And it is not a Bell-to-Bell merger of adjacent service
territories. Rather, it is a merger of broadly complementary assets dispersed
nationwide. Specific market benefits include:

-  Internet and Data Services. Promoting competition in the critically          
  important Internet backbone business, which is today highly concentrated and  
 is dominated to an increasing degree by the Big Three long distance            
incumbents. This will enhance competitiveness of the Internet itself and       
advanced services generally.

-  Long Distance. Allowing the combined company to use long distance capacity   
  on the facilities-based national network that GTE is deploying for carrying   
 its combined traffic volumes, including traffic originating in New York. It    
also allows the merged company to begin offering competitive services in       
packages to businesses both in New York and in L.A., Seattle, Dallas, or       
other GTE areas. This will make the combined long distance business of the     
merged company a more effective competitor, and speed deployment of a fourth   
national facilities-based long distance network.

-  Wireless. Combining the complementary wireless properties of Bell Atlantic,
   GTE, and Vodafone will create a third national wireless network that can     
  compete effectively in a business where national coverage has proven to be    
 increasingly important.

-  Local and Bundled Service Offerings. The combination of the two companies'
   massive investments outside their traditional service areas in long.         
  distance, Internet and wireless businesses will create a critical fourth      
 nationwide provider with the reach and mix of services necessary to compete    
effectively in the emerging national market for bundled services.

NOTE: THE FULL TEXT FCC DOCUMENT WILL BE AVAILABLE ON OUR
      WEBSITE

END
MSCLDLLLBFBXBBX

Banco Lat.8%Pfd (LSE:BAN)
Historical Stock Chart
From Jun 2024 to Jul 2024

Banco Lat.8%Pfd (LSE:BAN)
Historical Stock Chart
From Jul 2023 to Jul 2024