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Verizon GTE Merger -- How Did it Go?

hancock4@bbs.cpcn.com
30 Nov 2005 07:35:52 -0800

A while back Verizon (formerly Bell Atlantic and Nynex NY Telephone et
al) acquired GTE -- General Telephone & Electronics local phone
companies. GTE was the biggest of the "independents", that is, local
telephone companies not affiliated with the Bell System.

I was wondering how well the integration of GTE into Verizon was
working.

The former Bell System was heavilly standardized, down to the pens on
desktops. Most equipment came from Western Electric and usually
(though not always) was the same throughout the country. By equipment
I mean switchgear, carrier technology, and local loop plant (and pay
phones). Also, business practices were somewhat consistent, such as
rate plans and service representative styles.

In contrast, I don't know how much GTE was standardized. For one
thing, GTE was made up of smaller local independent companies acquired
or traded over the years. In the 1970s, many local companies
"swapped" exchanges so as to give each other contiguous areas instead
of a patchwork for more efficiency.

GTE owned a supplier, Automatic Electric. However, I wonder if GTE
was so strictly wedded to AE as was Bell to Western. In other words,
over the years perhaps equipment from other suppliers was used as
well. My impression was that GTE was always more "informal" and less
rigid than the Bell System in doing things. (Just as Remington
Rand/Sperry Univac was much more informal than IBM in the computer
industry).

A key difference between Bell and GTE was that overall GTE (and the
other independents) tended to serve much less densely populated areas.
A map of Pennsylvania shows half the land mass of the state served by
"independents" yet the vast majority of phones were under Bell
control. Historically, Bell gained control of the cities and nearby
suburbs while the independents were generally left with the rural
areas (there are some exceptions). I wonder if this characteristic
has impacted the merger.

Merging two dis-similar organizations can bring down both if not done
carefully. The Penn Central Railroad is the classic example of how
not to do a merger. In more recent years, megarailroad and airline
mergers have had troubles too.

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