Bell Atlantic eases fed concerns in wake of Nynex merger

The president of Bell Atlantic's Federal Systems Division last week contacted the organization's top customers to answer questions about the proposed merger of Bell Atlantic Corp. and Nynex Corp. and to assure customers the deal would have no negative impact on their operations.

Division president Barbara Connor said she spent much of last Monday on the phone with federal managers to help them handle queries from users on the impact of the deal.

"We are committed to deliver service to the federal government even better than we have in the past," Connor said. "If anything, the change will be positive. We are definitely taking a look at expanding markets and bringing new products and services to the federal government."

A Bell Atlantic spokeswoman said the long-rumored merger would create the nation's second-largest telecommunications company—second only to AT&T—with 1995 revenue of $27.8 billion. The combined company would serve 26 million customers in 13 states and the District of Columbia. The new company's name would be Bell Atlantic, with its headquarters in New York City.

The $23 billion merger agreement is subject to the approval of federal and state regulators. Bell Atlantic and Nynex hope to close the merger within 12 months.

Connor said she did not believe the merger would strongly affect employees working on Bell Atlantic's federal contracts. "The impact on our employees, I think, will be relatively minor," she said. "I would not expect there to be any significant changes."

Bell Atlantic's federal business includes the Defense Department's $600 million Telecommunications Modernization Project and the Defense Advanced Research Projects Agency's Advanced Technology Demonstration Network. Connor characterized Nynex's federal business as "very small."

Four federal telecom managers, interviewed last week at an FTS 2000 conference, said they were not concerned about the impact of the proposed deal. The managers, who declined to be identified, said they did not expect to experience significant consequences from the merger for years.

Rival telecommunications provider AT&T, however, expressed concern with the pending merger.

Dick Lombardi, president of business communications services at AT&T Government Markets, said the merger would have a negative impact on competition for government business. He said the teaming of the two companies would reduce competition among local phone service providers vying for federal contracts.

"You have to ask how this is benefiting the user and the taxpayer," Lombardi said. "You have to cynically ask if this is being done to continue the monopoly at the local level."

Connor said AT&T officials are simply afraid of a new competitor. "The fact [that] they are so concerned probably means this is in the customers' best interest," she said. "By unifying these territories, we are in a much better position to open up not only local markets but long-distance markets to competition."