The proposal filed at the U.S. Federal Communications Commission is intended to let Bell Atlantic comply with rules that bar regional phone companies from transmitting voice and Internet calls over long distances until local markets are open to rivals. GTE isn't subject to the restrictions, so Bell Atlantic must resolve the issue before the transaction can be approved.
With submission of the plan, the companies asked the FCC to resume consideration of the transaction, a process that had been on hold since early last year as Bell Atlantic sought and won approval to offer long-distance in New York. The companies said they will hold 10 percent of the Internet company, with the option to boost that up to 80 percent within five years.
"The merger of Bell Atlantic and GTE will produce enormous benefits and readily satisfies the FCC's public interest standard," said Tom Tauke, senior vice president for government relations at Bell Atlantic. The proposal also addresses long-distance concerns that the FCC might have had and allows the companies to comply with the letter of the law, he said.
The companies offered commitments "patterned closely" on the SBC Communications purchase of Ameritech last year, which won FCC approval after the companies offered to comply with numerous conditions. The $500 million, three-year investment outside the local region will let the combined company compete with companies such as SBC to sell advanced services, the companies said.
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