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. Last Updated: 07/27/2016

FCC Approves GTE, Bell Merger

WASHINGTON -- The U.S. Federal Communications Commission on Friday approved the proposed merger of Bell Atlantic Corp. and GTE Corp., clearing the final obstacle to the creation of the nation's largest telephone company.

The new company, which will be called Verizon once the deal is closed later this month, will control a third of the United States' local telephone market, some 63 million local lines, plus 25 million cellular telephone customers, in 40 states. It is the latest in a series of mergers and acquisitions that has put the nation's telephone and high-speed Internet system in the hands of a few huge corporations that are planning to offer consumers a variety of services from cable television to cell phone and local and long-distance calling.

Federal regulators say they have approved every deal in the frenzied consolidation of the industry in the hopes that a few telecommunications giants would have the capital and expertise to quickly roll out new technologies, like high-speed Internet service, at affordable prices for consumers. But consumer groups have raised concerns that the domination of the industry by a handful of companies could ultimately prove costly to consumers and discourage the kind of innovation and price wars that accompany robust competition.

"There will be those that will claim this merger brings us closer to a re-emergence of Ma Bell," said William Kennard, the chairman of the FCC." However, my support is predicated on the applicants' enforceable commitments to open ? traditional local markets to competitors, invest in new markets and accelerate deployment of broadband technologies. The end result should produce more competition, not less."

Executives of Bell Atlantic and GTE vowed Friday that, for their current customers, the conditions imposed on the company will yield economies of scale and lower prices, permitting Verizon to offer packages of services f wireless and wired telephone service as well as high-speed Internet f on one bill. Government officials also said the deal would promote competition both inside and outside the markets dominated by Bell Atlantic.

"The FCC recognizes that this merger uniquely combines complementary assets that will generate enormous public-interest benefits," said Ivan Seidenberg, chairman and chief executive of Bell Atlantic. "We look forward to creating the next great brand in communications, one that will set the standard for global communications companies."

But disputing the government and companies, consumer groups warned that the deal, along with other telecommunications mergers, would dampen competition in a field in which many customers already face few choices, higher prices for some services and largely unregulated monopolies. They noted that as a result of this latest deal, two companies, Verizon and SBC Communications Inc., would now control 69 percent of the nation's telephone lines.

"Instead of being positioned to compete against each other, six of the eight equal-sized local telephone monopolies have been consolidated into two super-regional fortress monopolies, Bell Atlantic and SBC," said Gene Kimmelman, co-director of the Washington office of Consumers Union.

The approval of the two-year-old deal had been expected for months, but was delayed as regulators and lawyers for the companies struggled over the difficult issue of permitting the consolidation of a local telephone company, Bell Atlantic, with GTE, which has a huge long-distance Internet business, Genuity. Federal regulations restrict the local company from entering the long-distance business.