June 16, 2000

STATEMENT OF FCC CHAIRMAN WILLIAM E. KENNARD ON THE 
COMMISSION’S APPROVAL OF BELL ATLANTIC/GTE MERGER

	Washington, DC – In this era of convergence, we must be mindful of over-
consolidation.  There will be those that will claim this merger brings us closer to a 
reemergence of Ma Bell, however, my support is predicated on the applicants’ 
enforceable commitments to open its traditional local markets to competitors, invest in 
new markets, and accelerate deployment of broadband technologies.  The end result 
should produce more competition not less.

My support also rests on the merged company’s compliance with section 271.  
Section 271 is at the heart of Congress’ competitive vision and the statutory framework 
of the 1996 Act.  Thus I could not have allowed this, or any other merger, to violate this 
core Act provision.  In short, the required spin-off makes this merger lawful.  Although 
the terms of the spin-off are intricate, the principles are straightforward.  First, Genuity 
will be owned and controlled by an independent public entity, thereby ensuring a healthy 
Internet backbone company. Second, whether the merged company, Verizon, ever 
reacquires Genuity remains an open question, but in any event cannot occur unless and 
until Verizon opens its local markets to competition as contemplated under the Act.  
Indeed, the meaningful financial risks and limitations conditioning the spin-off 
powerfully incent Verizon to expeditiously seek long distance approval in all Bell 
Atlantic states.  Finally, the conditions ensure that Verizon cannot benefit from its 
interest in Genuity before the Act says so – when there is a meaningful opportunity to 
compete in its local markets. 

By requiring that the Internet backbone asset be spun-off and through the other 
merger conditions, we have preserved the fundamental incentive structure of the Act, 
sought to stimulate competition, and to promote more and better service offerings for 
consumers.  For these reasons, I support this merger.

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This is an unofficial announcement of Commission action.  Release of the full text of a Commission order
constitutes official action.  See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).