BELL ATLANTIC, COMPETITION and the TELECOMMUNICATIONS INDUSTRY
Passage of the Telecommunications Act of 1996 established criterion for abolition of the competitive restraints of the Modified Final Judgment (MFJ), the court decision that compelled AT&T to break up in 1984, and caused the creation of the "Baby Bells," including Bell Atlantic. Of primary concern to Bell Atlantic is the blurring of the division between local and long-distance providers of telecommunications services resulting from the Act's ratification. Local operators can now offer long distance, cable, and other types of services; long-distance and cable firms have been given the option of entering the local market. These conditions significantly expand the possibility of competition from a wide variety of players in markets where Bell has previously enjoyed near-monopoly. Long-distance providers have particularly shown interests in entering local markets. Bell must demonstrate it can prosper under these conditions. Their has already been a strong indication that Bell will counter entry into formerly-controlled local markets, by expanding into the long-distance arena. In this respect, it is expected that the firm's favorable brand recognition among local consumers should provide some competitive edge. Bell Atlantic has also moved ahead with merger plans with NYNEX, a strategy designed to take advantage of their mutual economies of scale and create substantial new synergy's as a consequence of their contiguous networks and high-traffic areas of service. Here again, substantial advantage over the competition is expected.
BELL ATLANTIC CORPORATION:
A STOCK ANALYSIS REPORT
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