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Bell Atlantic, GTE Merger Hits Snag

March 12, 1999

WASHINGTON (AP) _ Federal regulators’ decision on Bell Atlantic’s planned takeover of GTE could be delayed until a thorny issue is resolved involving GTE’s Internet and long-distance services, the chairman of the Federal Communications Commission said Friday.

Back in January, Chairman Bill Kennard said he expected the FCC to decide the fate of the Bell Atlantic-GTE merger as well as another planned merger between SBC Communications and Ameritech by midyear.

But on Friday, Kennard told reporters that it’s still unclear how the merged company intends to comply with a 1996 law that forbids Bell Atlantic from offering Internet services across local calling boundaries and long-distance service to local phone customers.

``I wouldn’t say it’s not on track, but we have to get past this particular issue,″ Kennard said. ``But because of that particular issue I can’t give you a definitive timetable.″

Some of GTE’s long-distance customers might eventually have to switch to another long-distance carrier if the company completes the planned merger.

Bell Atlantic isn’t allowed to provide long-distance service to customers living in its local phone region until it receives permission from the FCC. Neither Bell Atlantic nor any other local Bell telephone company has gotten such approval.

As a result, Bell Atlantic and GTE have asked the FCC to give the merged company two years to move GTE’s long-distance customers off its network to other carriers, in any of the states where Bell Atlantic doesn’t have approval to provide long-distance service.

Bell Atlantic provides local phone service in 13 states and the District of Columbia and hasn’t received approval to provide long-distance service to those areas.

GTE and Bell Atlantic also have asked the FCC to give them a two-year break from rules that prevent Bell Atlantic and other Bell companies from carrying Internet traffic across local calling boundaries, which for regulatory purposes constitute long-distance service.

That would permit Bell Atlantic to continue operating GTE’s Internet ``backbone″ business, while it seeks to obtain authority to provide long-distance service. Internet backbones are high capacity networks that carry data traffic for third parties.

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