Bell Atlantic-GTE Merger Hits Judicial Roadblock in Pa.

A Pennsylvania administrative judge, blasting Bell Atlantic's proposed takeover of GTE as anticompetitive, is recommending that state regulators deny approval for the merger.

It is "impossible to look at the proposed merger of Pennsylvania's two largest incumbent local exchange carriers . . . and see such a combination as procompetitive," Administrative Law Judge (ALJ) Morris Solomon told the Public Utility Commission.

He said concessions the two companies had offered don't reduce the likely damage to competition. Solomon said he was open to changing his mind, but only if both carriers demonstrated they had fulfilled the 1996 Telecom Act's 14-point market-opening checklist for Bell long-distance approval.

"We're hopeful that the full commission will recognize the many benefits of our proposed merger and approve it," Bell Atlantic and GTE said in a statement. "The judge's recommendation totally ignores state and federal regulatory actions across the country, the substantial benefits to Pennsylvanians of the Bell Atlantic-GTE merger and the realities of today's telecommunications marketplace."

Jim Ginty, president of prospective competitor AT&T-Pennsylvania, said: "We continue to believe that the merger is a bad idea under any circumstances. We're gratified that the ALJ agreed with our position at this stage."

The merger has been approved by 30 states and the U.S. Justice Department. Bell Atlantic said its filing Wednesday with the Federal Communications Commission would be followed soon by a request for the commission's merger approval.