Copyright 2000 Newsday, Inc.
Newsday (New York, NY)
View Related Topics
January 28, 2000, Friday ALL EDITIONS
SECTION: BUSINESS & TECHNOLOGY; Page A57
LENGTH: 387 words
HEADLINE:
MERGER PARTNERS AGREE TO SELL OFF NET UNIT / BELL ATLANTIC, GTE SEEKING FCC
APPROVAL OF DEAL
BYLINE: REUTERS
BODY:
Washington - Telecommunications merger
partners Bell Atlantic Corp. and GTE Corp. yesterday offered, as expected, to
spin off most of GTE's Internet business to gain regulatory approval for their
deal.
The merger of Manhattan-based Bell Atlantic - the dominant
provider of local service in 13 states from Maine to Virginia and now a provider
of long- distance service in New York State - with Irving, Texas-based GTE,
which is a more diversified carrier, would create the largest U.S. local phone
company, with combined revenues of more than $ 58 billion.
But under the
1996 Telecommunications Act, Bell Atlantic and the other Bell companies created
in the 1984 breakup of AT&T are not permitted to offer long-distance voice
or data service within their regions until they open their local networks to
competitors. In a filing with the Federal Communications Commission, the
companies said they would offer to the public 90 percent of GTE's fast-growing
Internet business, which the law currently bars Bell Atlantic from owning. The
companies have previously said such an offering could raise $ 2.5 billion.
The companies would retain, for five years, the right to buy back the
unit if Bell Atlantic receives FCC permission.
The formal offering to
the FCC follows months of closed-door discussions with agency staff.
Last year, proposals were made to resolve the problem by putting the
Internet business in a trust or issuing a tracking stock, but FCC officials
quickly shot these down as insufficient.
To gain further regulatory
support, the companies also committed to invest $ 500 million to compete with
other dominant local carriers outside Bell's and GTE's own traditional service
areas. And in areas where GTE will continue to offer long-distance service, the
company said it would stop charging a monthly minimum fee if competitor AT&T
Corp. did the same.
The FCC will likely ask for public comment on the
filing before taking further action.
Last month, Bell Atlantic received
the FCC's blessing to offer long-distance service in New York State, but gaining
approval in the remaining states could take several years.
The Justice
Department approved the merger last year, but the FCC has continued to hold up
the deal because of the Internet long-distance issue.
LOAD-DATE: January 31, 2000
