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July 22, 1997updated 05 Sep 2016 1:03pm

BELL ATLANTIC AND NYNEX DEAL SECURES FCC BACKING

By CBR Staff Writer

Bell Atlantic Corp and Nynex Corp look to have won final FCC approval for their long-planned merger, following the companies’ pre-emptive announcement of further concessions aimed at fostering competition in their Northeast phone markets. The raft of commitments is an attempt to speed approval of the deal which was first announced in April last year, but still requires the green light from FCC, the last clearance the two Bells need before they can close the pending merger. The deal has already won Justice Department clearance and FCC chief Reed Hundt has suggested that the FCC will give its go ahead on the deal: Based on these conditions, I personally believe we can and should approve the merger as in the public interest, said Hundt. Under the new commitments Bell Atlantic and Nynex agreed to offer a uniform electronic system through which rivals can order services, switch customers and perform other functions central to offering competing local phone services. The two also agreed to offer smaller rivals the option of paying up-front fees for connecting to their networks – which can easily run into the hundreds of thousands of dollars – in installments, rather than having to dole out those payments in one lump sum. They also agreed to continue to base the prices they charge rivals on forward looking costs rather than on embedded costs, as many Bells prefer to do. According to Hundt, the conditions guarantee a chance for all competitors to compete on a level playing field across the entire region. He also said that he viewed the conditions as more than compensation for the loss of Bell Atlantic as a potential competitor in the Nynex region. The Bells also agreed to submit a number of detailed reports to the agency that track everything from their interconnection arrangements with rivals to billing and trouble reports, giving the agency an easy way to gauge how equitable – or not – the two companies are treating rivals. Should the Bells fail to live up to their end of the bargain, under the terms announced, rivals would have the option of appealing directly to the FCC, further strengthening the agency’s oversight authority over them. FCC conditions would expire four years after the merger closes, giving rivals an incentive to move into the nation’s local phone markets sooner rather than later. According to Tom Tauke, Nynex’s executive vice president of government affairs, the agreement demonstrates our commitment to full competition in the local phone markets, and sets the stage for rapid approval of the Bell Atlantic-Nynex merger.

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