Opinion ID: 185544
Heading Depth: 2
Heading Rank: 2

Heading: The Bell Atlantic/NYNEX Merger

Text: 5 Bell Atlantic (which became Verizon as part of a subsequent merger with GTE Corporation) and NYNEX announced their intent to merge on April 23, 1996, and sought FCC approval of the transfer of licenses. On August 14, 1997, the FCC approved the merger, but with nine conditions that would remain in effect for a four-year period. See Memorandum Opinion and Order, Applications of NYNEX Corp., Transferor, and Bell Atlantic Corp., Transferee, For Consent to Transfer Control of NYNEX Corp. and Its Subsidiaries, 12 FCC Rcd 19985, 20069-79 (1997) (Merger Order). The Merger Order outlines significant concerns over the harm to competition that would be caused by the Bell Atlantic/NYNEX merger. See id. at 20008-63. In response to the concerns, on July 19, 1997, Bell Atlantic and NYNEX submitted an ex parte filing proffering a number of specific commitments they would undertake as conditions of the approval of the transfer of [the] licenses. Id. at 20069, p 178. Based on these commitments, the FCC proceeded to approve the merger. See id. The FCC concluded that these commitments are sufficient to outweigh the harm to the public interest, and approved the merger, subject to the nine voluntary conditions set forth by the FCC in Appendix C of the Merger Order. Id. at 20069, p 179. The conditions are: 1) The preparation of Performance Monitoring Reports; 2) providing uniform interfaces for use by carriers purchasing interconnection; 3) conducting operational testing of the interfaces; 4) proposing certain options for carriers purchasing interconnection; 5) providing shared transport based on forward-looking, economic costs; 6) proposing rates based upon forward-looking, economic cost; 7) engaging in good faith negotiations to establish performance standards; 8) a 48month sunset provision; and 9) a commitment to negotiate requested supplements to existing agreements based on these conditions. Merger Order, 12 FCC Rcd at 20107-12, App. C p p 1-9. At issue in this appeal is Paragraph 6 of the conditions, which provides: 6 To the extent Bell Atlantic/NYNEX proposes rates, including in interconnection negotiations and arbitrations, for interconnection, transport and termination, or unbundled network elements, including both recurring and nonrecurring charges, any such proposal shall be based upon the forward-looking, economic cost to provide those items. Id. at 20111, p 6. The Merger Order was issued less than a month after the Eighth Circuit originally ruled that the FCC lacked authority to issue pricing methodology regulations binding on the states and vacated the FCC's pricing rules. See Dismissal Order, 15 FCC Rcd at 17069, p 9.