Washington, D.C., February 15, 2000 – The Competitive Telecommunications Association (CompTel), the leading industry association of competitive telecommunications providers and their suppliers, in comments to be filed later today with the Federal Communications Commission (FCC), will oppose Bell Atlantic/GTE’s divestiture proposal regarding GTE Internetworking (GTE-I). The association said it "strongly opposed" the proposal because BA/GTE "would exercise de facto control over the divested company known as DataCo." As a result, CompTel said this would enable the merged BA/GTE to provide in-region long distance services on the date of divestiture—a violation of the 1996 Telecom Act’s Section 271.

Specifically, CompTel pointed out that the FCC ought to require the full and complete divestiture of GTE-I before permitting the proposed merger to proceed. CompTel said a full and complete divestiture "requires eliminating [BA-GTE’s] conversion rights, prohibiting [them] from reacquiring a controlling interest for five years, and adopting the conditions necessary to ensure that the divested entity can operate as a strong, stand-alone competitor in the Internet backbone market on the day of divestiture." As proposed by BA/GTE, no subsequent debt or equity investor could wrest ultimate control of DataCo from BA/GTE, regardless of the DataCo’s performance, without BA/GTE’s approval.

As an alternative, CompTel urged that, should the FCC decide not to require the full divestiture of DataCo, it should require the merged entity to exercise its conversion rights within two years—instead of the proposed five years—from the consummation of the merger. This requirement "would provide a strong incentive for Bell Atlantic to accelerate its efforts to open local markets to competitive entry" and comply with the Telecom Act.

The association said that it does "not object to permitting the merged entity to retain a 10 percent equity interest," but "it must relinquish its conversion rights" because taken in combination, the equity interest, so-called investor protections and stock conversion rights will enable the merged company to retain control of DataCo.

Copies of CompTel’s filing are available online at CompTel’s Web site, www.comptel.org, or by contacting the association’s public relations office.

* * * * *

Last Minute Reminder: Registration for media who wish to attend CompTel’s Annual Convention and Trade Exposition Feb. 20-23 in Long Beach, CA is free. See CompTel’s Web site home page, Long Beach Press Info for information at http://www.comptel.org/ or, contact Pam Small (psmall@comptel.org) or Kathleen Franklin (kfrankln@erols.com), 202/296-6650.

Based in Washington, DC, CompTel is the leading trade association representing approximately 350 U.S. and international competitive communications firms and their suppliers who offer a variety of local, long distance, Internet and wireless services. The association’s members include global and national firms, regional carriers and emerging local competitive companies.