GTE Corporation

Wikipedia 🌐 GTE

Notes :

GTE Corporation becomes Verizon Communications Incorporated (in 2000)

GTE Corporation acquired BBN Planet, one of the earliest Internet service providers, in 1997. See BBN Technologies, Incorporated .

1991 - Purchased Contel Corporation

Saved Wikipedia (Dec 4, 2020) - GTE


Former type Public

Industry Telecommunications

Fate Acquired by Bell Atlantic

Successor [Verizon Communications Incorporated]

Founded 1934; 86 years ago

Defunct 2000; 20 years ago

Headquarters Stamford, Connecticut, U.S.

Products Telephone, internet, television

Subsidiaries GTE Southwest / CODETEL / Verizon California / Verizon Florida / Verizon North / Verizon South / Hawaiian Telephone / Puerto Rico Telephone

GTE Corporation, formerly General Telephone & Electronics Corporation (1955–1982), was the largest independent telephone company in the United States during the days of the Bell System. The company operated from 1926, with roots tracing further back than that, until 2000, when it was acquired by Bell Atlantic; the combined company took the name Verizon.

The Wisconsin-based Associated Telephone Utilities Company was founded in 1926; it went bankrupt in 1933 during the Great Depression, and was reorganized as General Telephone in 1934.[2]In 1991, it acquired the third largest independent, Continental Telephone ([Contel Corporation]). It owned Automatic Electric, a telephone equipment supplier similar in many ways to Western Electric, and Sylvania Lighting, the only non-communications-oriented company under GTE ownership. GTE provided local telephone service to many areas of the U.S. through operating companies, much as American Telephone & Telegraph provided local telephone service through its 22 Bell Operating Companies.

The company acquired BBN Planet, one of the earliest Internet service providers, in 1997. [Note - "BBN Planet" was an internet service provider created by BBN Technologies, Incorporated. However, the "BBN Planet" acquisition is actually for the entirety of BBN Technologies, Incorporated.] That division became known as GTE Internetworking, and was later spun off into the independent company Genuity [(See Genuity Incorporated (2000) - Note that the name "Genuity" is recycled from another Internet company GTE acquired in 1997 - See Genuity Incorporated )] to satisfy Federal Communications Commission (FCC) requirements regarding the GTE-Bell Atlantic merger that created Verizon.[4]

GTE operated in Canada via large interests in subsidiary companies such as BC Tel and Quebec-Téléphone. When foreign ownership restrictions on telecommunications companies were introduced, GTE's ownership was grandfathered. When BC Tel merged with Telus (the name given the privatized Alberta Government Telephones (AGT)) to create BCT.Telus, GTE's Canadian subsidiaries were merged into the new parent, making it the second-largest telecommunications carrier in Canada. As such, GTE's successor, Verizon Communications, was the only foreign telecommunications company with a greater than 20% interest in a Canadian carrier, until Verizon completely divested itself of its shares in 2004.[5]

In the Caribbean, CONTEL purchased several major stakes in the newly independent countries of the British West Indies (namely in Barbados, Jamaica, and Trinidad and Tobago).[6][7][8]

Prior to GTE's merger with Bell Atlantic, GTE also maintained an interactive television service joint-venture called GTE mainStreet (sometimes also called mainStreet USA) as well as an interactive entertainment and video game publishing operation, GTE Interactive Media.[9][10][11]


In 1918, Wisconsin public utility accountants Sigurd L. Odegard, John A. Pratt, John F. O'Connell bought the Richland Center Telephone Company for over $30,000 in Wisconsin. In 1920, the three accountants formed Commonwealth Telephone Company as the parent of Richland Center Telephone. Odegard was named president, Pratt vice-president, and O'Connell secretary. In 1922, Clarence R. Brown took over as vice-president when Pratt left the company that year.[12]

Commonwealth Telephone expanded across southern Wisconsin, and made its first purchase outside the state later in the decade when it bought Belvidere Telephone Company in Illinois. It also acquired two electric utilities in Wisconsin. In 1926, the company bought Associated Telephone Company in Long Beach, California. Later that year, Commonwealth Telephone and Associated Telephone merged as Associated Telephone Utilities.

From 1926 to 1923, Associated Telephone Utilities bought over 300 telephone companies across the United States. During this time period, Associated Telephone Investment Company was created in 1930 as a branch of Associated Telephone Utilities. By 1933, both Associated Telephone Utilities and its branch went out of business due to financial losses.

General Telephone

In 1935, General Telephone Corporation was established with John Winn as president. The following year, the company created General Telephone Directory Company as a division. In World War II, General Telephone helped install phone service for military facilities. From 1946 to 1950, General Telephone obtained over 100,000 telephone lines and bought out Leich Electric Company.

General Telephone’s holdings included 15 telephone companies across 20 states by 1951, when Donald C. Power was named president of the company under chairman and long-time GT executive Morris F. LaCroix, replacing the retiring Harold Bozell (president 1940 - 1951). Power proceeded to expand the company through the 1950s principally through two acquisitions.

In 1955, Theodore Gary & Company became a part of General Telephone and allowed the company to hold over 2 million telephone lines after the company merge. It also had a subsidiary, named the General Telephone and Electric Corporation, formed in 1930 with the Transamerica Corporation and British investors to compete against ITT.[13]

In 1959, Sylvania Electric Products merged into General Telephone and was renamed to General Telephone & Electronics Corporation (GT&E). Power also obtained the purchases of multiple companies. such as Lenkurt Electric Company, Inc and Peninsular Telephone Company. In 1960, GT&E International Incorporated was created as a branch company. Power was named C.E.O. and chairman in 1961, making way for Leslie H. Warner, formerly of Theodore Gary, to become president. Simultaneously, GT&E went on to buy Community Antenna Television providers.

In 1964, Western Utilities Corporation became part of GT&E. Additional purchases during the 1960s included Hawaiian Telephone Company and Northern Ohio Telephone Company. At the end of the decade, ten million GT&E phones were active.

In the late 1960s, GT&E joined in the search for a railroad car Automatic Car Identification system. It designed the KarTrak optical system, which won over other manufacturer's systems in field trials, but ultimately proved to need too much maintenance. In the late 1970s the system was abandoned.

After a 1970 bomb attack to the company's headquarters in New York City, the company relocated to Stamford, Connecticut for their new headquarters. In 1971 GT&E undertook an identity change and became simply GTE, while Sylvania Electric Products became GTE Sylvania.[14] The same year, Donald C. Power retired and Leslie H. Warner became chairman of the Board. Theodore F. Brophy was brought in as president.

In 1974, GTE joined American Telephone & Telegraph in a project to create satellite stations. A few years later, the company's international branch was replaced by a GTE products company in 1976. Their products company remained until 1979. In 1979, GTE purchased Telenet to establish a presence in the growing packet switching data communications business. GTE Telenet was later included in the US Telecom joint venture.


In December 1983 Vanderslice stepped down as the company's president and chief operating officer.

In April 1988, after the retirement of Theodore F. Brophy, James L. "Rocky" Johnson was promoted from his position as president and chief operating officer to CEO of GTE, he was appointed chairman in 1991.[15]


In April 1992, James L. "Rocky" Johnson retired after 43 years at GTE, remaining on the GTE board of directors as Chairman Emeritus. Charles "Chuck" Lee was named to succeed Johnson. In 1994, Lee sold the company's satellite provider, Spacenet, to General Electrics and Contel of Maine to Oxford Networks, which placed the company into a newly created subsidiary, Oxford West Telephone

Acquisition by Bell Atlantic

Bell Atlantic acquired GTE on June 30, 2000, and named the new entity [Verizon Communications Incorporated]. The GTE operating companies retained by Verizon are now collectively known as Verizon West division of Verizon (including east coast service territories). The remaining smaller operating companies were sold off or transferred into the remaining ones. Additional properties were sold off within a few years after the merger to CenturyTel, Alltel, and Hawaiian Telcom. On July 1, 2010, Verizon sold many former GTE properties to Frontier Communications.[16] Other GTE territories in California, Florida, and Texas were sold to Frontier in 2015 and transferred in 2016, thus ending Verizon's landline operations outside of the historic Bell Atlantic footprint.[17] Verizon still operates phone service in non-Bell System areas in Pennsylvania under Verizon North, and in non-Bell System areas in Virginia and Knotts Island, North Carolina under Verizon South.

Operating companies

Prior to the acquisition with Bell Atlantic, GTE owned the following operating companies in the US:[18]

Following the acquisition with Bell Atlantic, some of these companies and/or access lines have been sold off to other companies, such as Alltel, ATEAC,[19] The Carlyle Group, CenturyTel, Citizens/Frontier Communications, and Valor Telecom.

Funding Universe (1996) - GTE Corporation History

Source - [HW005G][GDrive]

Also see : GTE Company Profile, from (saved Dec 2020) ( source - [HW005B][GDrive] )

Address: One Stamford Forum , Stamford, Connecticut 06904 U.S.A. [...]

Incorporated: 1920 as Commonwealth Telephone Company

Employees: 111,000 (1996) / Sales: $19.9 billion (1994) [...]

Company History


In 1920 that principle was put into action, and the three accountants formed a corporation, Commonwealth Telephone Company, with Odegard as president, Pratt as vice-president, and O'Connell as secretary. Richland Center Telephone became part of Commonwealth Telephone, which quickly purchased telephone companies in three nearby communities. In 1922 Pratt resigned as vice-president and was replaced by Clarence R. Brown, a former Bell System employee.

By the mid-1920s Commonwealth had extended beyond Wisconsin borders and purchased the Belvidere Telephone Company in Illinois. It also diversified into other utilities by acquiring two small Wisconsin electrical companies. Expansion was stepped up in 1926, when Odegard secured an option to purchase Associated Telephone Company of Long Beach, California. Odegard, with the assistance of Marshall E. Sampsell, president of Wisconsin Power and Light Company, and Morris F. LaCroix, a partner in Paine, Webber & Company in Boston, proceeded to devise a plan for a holding company, to be named Associated Telephone Utilities Company.

That company was formed in 1926 to acquire Associated Telephone Company and assume the assets of Commonwealth Telephone. Sampsell was elected president of the new company, and Odegard and LaCroix were named vice-presidents. An aggressive acquisition program was quickly launched in eastern, midwestern, and western states, with the company using its own common stock to complete transactions.

During its first six years, Associated Telephone Utilities acquired 340 telephone companies, which were consolidated into 45 companies operating more than 437,000 telephones in 25 states. By the time the stock market bottomed out in October 1929, Associated Telephone Utilities was operating about 500,000 telephones with revenues approaching $17 million.

In January 1930 a new subsidiary, Associated Telephone Investment Company, was established. Designed to support its parent's acquisition program, the new company's primary business was buying company stock in order to bolster its market value. Within two years the investment company had incurred major losses, and a $1 million loan had to be negotiated. Associated Telephone Investment was dissolved but not before its parent's financial plight had become irreversible, and in 1933 Associated Telephone Utilities went into receivership.

The company was reorganized that same year and resurfaced in 1935 as General Telephone Corporation, operating 12 newly consolidated companies. John Winn, a 26-year veteran of the Bell System, was named president. In 1936 General Telephone created a new subsidiary, General Telephone Directory Company, to publish directories for the parent's entire service area.

In 1940 LaCroix was elected General Telephone's first chairman, and Harold Bozell, a former banker for Associated Telephone Utilities, was named president. Like other businesses, the telephone industry was under government restrictions during World War II, and General Telephone was called upon to increase services at military bases and war-production factories.

Following the war, General Telephone reactivated an acquisitions program that had been dormant for more than a decade and purchased 118,000 telephone lines between 1946 and 1950. In 1950 General Telephone purchased its first telephone-equipment manufacturing subsidiary, Leich Electric Company, along with the related Leich Sales Corporation.

Bozell retired in 1951 and Donald Power, a former executive secretary for Ohio Governor John Bricker, was named president. By the time Power took over, General Telephone's assets included 15 telephone companies operating in 20 states. During the 1950s Power guided the company in a steady, aggressive acquisition campaign punctuated by two major mergers.

In 1955 Theodore Gary & Company, the second-largest independent telephone company, which had 600,000 telephone lines, was merged into General Telephone, which had grown into the largest independent outside the Bell System. The merger gave the company 2.5 million lines. Theodore Gary's assets included telephone operations in the Dominican Republic, British Columbia, and the Philippines, as well as Automatic Electric, the second-largest telephone equipment manufacturer in the U.S. LaCroix and Power were to retain their positions in the merged company, but a month before the deal was closed, LaCroix died, and Power assumed the additional title of chairman.

In 1959 General Telephone and Sylvania Electric Products merged, and the parent's name was changed to General Telephone & Electronics Corporation (GT&E). The merger gave Sylvania--a leader in such industries as lighting, television and radio, and chemistry and metallurgy--the needed capital to expand. For General Telephone, the merger meant the added benefit of Sylvania's extensive research and development capabilities in the field of electronics. Power also orchestrated other acquisitions in the late 1950s, including Peninsular Telephone Company in Florida, with 300,000 lines, and Lenkurt Electric Company, Inc., a leading producer of microwave and data transmissions system.

In 1960 the subsidiary GT&E International Incorporated was formed to consolidate manufacturing and marketing activities of Sylvania, Automatic Electric, and Lenkurt, outside the United States. The following year, Leslie H. Warner, a former Theodore Gary executive, was named president. Another former Theodore Gary executive, Don Mitchell, was named to the new position of vice-chairman, while Power remained chief executive officer and chairman.

During the early 1960s the scope of GT&E's research, development, and marketing activities was broadened. In 1963 Sylvania began full-scale production of color television picture tubes, and within two years it was supplying color tubes for 18 of the 23 domestic U.S. television manufacturers. About the same time, Automatic Electric began supplying electronic switching equipment for the U.S. defense department's global communications systems, and GT&E International began producing earth-based stations for both foreign and domestic markets. GT&E's telephone subsidiaries, meanwhile, began acquiring community-antenna television systems (CATV) franchises in their operating areas.

In 1964 Warner orchestrated a deal that merged Western Utilities Corporation, the nation's second-largest independent telephone company, with 635,000 telephones, into GT&E. The following year Sylvania introduced the revolutionary four-sided flashcube, enhancing its position as the world's largest flashbulb producer.

Warner assumed the additional title of chief executive officer in 1966, while Power remained chairman. Acquisitions in telephone service continued under Warner during the mid-1960s. Purchases included Quebec Telephone in Canada, Hawaiian Telephone Company, and Northern Ohio Telephone Company and added a total of 622,000 telephone lines to GT&E operations. By 1969 GT&E was serving ten million telephones.

In March 1970 GT&E's New York City headquarters was bombed by a radical antiwar group in protest of the company's participation in defense work. In December of that year the GT&E board agreed to move the company's headquarters to Stamford, Connecticut. Power retired in 1971, and Warner was named chairman and chief executive officer. The following year Theodore F. Brophy was named president.

After initially proposing to build separate satellite systems, GT&E and its telecommunications rival, American Telephone & Telegraph Co., announced in 1974 joint venture plans for the construction and operation of seven earth-based stations interconnected by two satellites. That same year Sylvania acquired name and distribution rights for Philco television and stereo products. GTE International expanded its activities during the same period, acquiring television manufacturers in Canada and Israel and a telephone manufacturer in Germany.

Warner retired in 1976 and Brophy was named to the additional post of chairman. Brophy, soon after assuming his new position, reorganized the company along five global product lines: communications, lighting, consumer electronics, precision materials, and electrical equipment. GTE International was phased out during the reorganization, and GTE Products Corporation was formed to encompass both domestic and foreign manufacturing and marketing operations. At the same time, GTE Communications Products was formed to oversee operations of Automatic Electric, Lenkurt, Sylvania, and GTE Information Systems.

Thomas A. Vanderslice was elected president and chief operating officer in 1979, and another reorganization soon followed. GTE Products Group was eliminated as an organizational unit and GTE Electrical Products, consisting of lighting, precision materials, and electrical equipment, was formed. Vanderslice also revitalized the GT&E Telephone Operating Group in order to develop competitive strategies for anticipated regulatory changes in the telecommunications industry.

GT&E sold its consumer electronics businesses, including the accompanying brand names of Philco and Sylvania in 1980, after watching revenues from television and radio operations decrease precipitously with the success of foreign manufacturers. Following AT&T's 1982 announcement that it would divest 22 telephone operating companies, GT&E made a number of reorganizational and consolidation moves.

In 1982 the company adopted the name GTE Corporation and formed GTE Mobilnet Incorporated, to handle the company's entrance into the new cellular telephone business. In 1983 GTE sold its electrical equipment, brokerage information services, and cable television equipment businesses. That same year, Automatic Electric and Lenkurt were combined as GTE Network Systems.

GTE became the third-largest long-distance telephone company in 1983 through the acquisition of Southern Pacific Communications Company. At the same time, Southern Pacific Satellite Company was acquired, and the two firms were renamed GTE Sprint Communications Corporation and GTE Spacenet Corporation, respectively. Through an agreement with the Department of Justice, GTE conceded to keep Sprint Communications separate from its other telephone companies and limit other GTE telephone subsidiaries in certain markets. In December 1983 Vanderslice resigned as president and chief operating officer.

In 1984 GTE formalized its decision to concentrate on three core businesses: telecommunications, lighting, and precision metals. That same year, the company's first satellite was launched, and GTE's cellular telephone service went into operation; GTE's earnings exceeded $1 billion for the first time.

James (Rocky) L. Johnson, a former senior vice-president, was named president and chief operating officer in 1986. That same year, GTE acquired Airfone Inc., a telephone service provider for commercial aircraft and railroads, and Rotaflex plc, a United Kingdom-based manufacturer of lighting fixtures.

Beginning in 1986 GTE spun off several operations to form joint ventures. In 1986 GTE Sprint and United Telecommunication's long-distance subsidiary, U.S. Telecom, agreed to merge and form US Sprint Communications Company, with each parent retaining a 50 percent interest in the new firm. That same year, GTE transferred its international transmission, overseas central office switching, and business systems operations to a joint venture with Siemens AG of Germany, which took 80 percent ownership of the new firm. The following year, GTE transferred its business systems operations in the United States to a new joint venture, Fujitsu GTE Business Systems, Inc., formed with Fujitsu Limited, which retained 80 percent ownership.

Johnson succeeded Brophy as chairman and chief executive officer in 1987 and then relinquished his president's title the following year to Charles R. Lee, a former senior vice-president. Johnson continued to streamline and consolidate operations, organizing telephone companies around a single national organization headquartered in the Dallas, Texas, area.

In 1988 GTE divested its consumer communications products unit as part of a telecommunications strategy to place increasing emphasis on the services sector. The following year GTE sold the majority of its interest in US Sprint to United Telecommunications and its interest in Fujitsu GTE Business Systems to Fujitsu.

In 1989 GTE and AT&T formed the joint venture company AG Communication Systems Corporation, designed to bring advanced digital technology to GTE's switching systems. GTE retained 51 percent control over the joint venture, with AT&T pledging to take complete control of the new firm in 15 years.

With an increasing emphasis on telecommunications, in 1989 GTE launched a program to become the first cellular provider offering nationwide service and introduced the nation's first rural service area, providing cellular service on the Hawaiian island of Kauai. The following year GTE acquired the Providence Journal Company's cellular properties in five southern states for $710 million and became the second largest cellular-service provider in the United States.

In 1990 GTE reorganized its activities around three business groups: telecommunications products and services, telephone operations, and electrical products. That same year, GTE and Contel Corporation announced merger plans that would strengthen GTE's telecommunications and telephone sectors.

Following action or review by more than 20 governmental bodies, in March 1991 the merger of GTE and Contel was approved. Johnson and Lee maintained their positions as chairman and president, respectively, while Contel's Chairman [Charles Wohlstetter (born 1910)] became vice-chairman of GTE. Contel's former president, Donald Weber, agreed to remain with the company during a six-month transition period, before leaving the merged company.

Contel Corporation's earliest predecessor, Telephone Communications Corporation, was founded by [Charles Wohlstetter (born 1910)]. After working as a Wall Street runner in the 1920s and as a Hollywood screenwriter in the 1930s, Wohlstetter returned to Wall Street in the 1940s and became a financier. In 1960 he made what he would later call a bad investment in an Alaskan oil company that would become the impetus for Contel.

To help turn that investment around, [Charles Wohlstetter (born 1910)] recruited the services of Jack Maguire and Phillip Lucier from a telephone supply company and then raised $1.5 million to form a holding company, Telephone Communications Corporation. Wohlstetter was named chairman of the new corporation, Lucier was named president, and Maguire was named vice-president. Some 30 years later, Wohlstetter's $1.5 million investment had grown into a company that had acquired and consolidated more than 750 smaller companies with total corporate assets hovering around $6 billion.

One of the company's first acquisitions was Central Western Company, which merged with Telephone Communications in 1961 to form the new parent Continental Telephone Company. The acquisition of Central Western, along with Harfil, Inc., provided the company with customer billing, general accounting, and toll separation services.

Continental based its early acquisition strategy on Kreigspiel, a historical war game German generals played at Prussian war colleges. [Charles Wohlstetter (born 1910)] applied the tenets of the game to telephone company operations and amassed detailed information on each independent telephone company in the United States. When those companies came up for sale, Wohlstetter and Maguire, who were pilots, and Lucier, whose wife was a pilot, would promptly fly off to meet the owners and negotiate purchase agreements.

Many of the early acquisitions were made through exchanges of stock, including the 1964 merger with Independent Telephone Company that doubled the company's size and changed its name in the process to Continental Independent Telephone Corporation. By the close of 1964, Continental had acquired more than 100 companies operating in 30 states.

The company adopted another new name, Continental Telephone Corporation, in 1965. Also during 1965 Continental acquired 65 more telephone companies and again doubled its size. By 1966 Continental had acquired more than 500 independent companies, had become the third-largest independent telephone company in the United States, and was one of the youngest companies ever listed on the New York Stock Exchange.

By 1970 Continental's assets had topped $1 billion, and sales volume had risen to $120 million. Lucier died that year and was succeeded as president by Maguire, who moved up from a vice-presidency. Aside from its dominating telephone business, the company's activities by that time had grown to include cable television systems, directory publishing, equipment leasing, and data services.

With the number of small independents having diminished considerably by 1970, Continental's pace in acquiring telephone operating companies was reduced. Continental sold its cable television business in 1971, and after a sluggish economy had taken its toll on Continental's manufacturing and supply subsidiaries, those, too, were sold in 1976. Maguire resigned in 1976 because of health problems and was succeeded as president by James V. Napier, a former executive vice-president. That same year, Continental became the first telephone company outside the Bell system to install a digital telephone switching system, a move that provided improved network operating efficiency, allowed the introduction of new calling features, and started the transition away from operations dominated by rural service areas.

In response to the changing regulatory climate of the telephone industry, in 1978 Continental mapped out a diversification strategy into nonregulated businesses. Continental's first diversification move came in 1979, with the acquisition of Executone, Inc., a New York-based communications equipment maker.

By 1980 Continental had two million telephone access lines in service and had established its first fiber-optic cable, a high-speed, high-capacity telecommunications transmission mode. While Continental continued the process of upgrading its telephone operations, during the early 1980s the company's focus turned to greater diversification.

In July 1980 Continental entered the satellite business through a joint venture with Fairchild Industries, and a communications partnership firm, American Satellite Company, was formed to operate a network of earth-based stations that provided voice and data services. To provide technology services to accommodate its expanding needs, Continental then acquired two consulting and research firms, Network Analysis Corporation and International Computing Company.

In 1981 Continental acquired Page Communications Engineers Inc., later renamed Contel Page, which gave Continental expertise in the engineering, installation, and maintenance of satellite-to-earth stations. One year later, Continental hooked up with Fairchild Industries in a second joint venture called Space Communications Company, a provider of tracking and relay data services for such clients as the National Aeronautics and Space Administration.

After the Federal Communications Commission opened the door to licenses for 30 cellular phone markets in 1981, Continental plunged into that field as well, acquiring sizable shares of cellular markets in Los Angeles, California; Washington, D.C.; and Minneapolis, Minnesota. Continental also entered the credit card authorization business in 1981, with the purchase of National Bancard Corporation. Two years later, Continental bolstered its interest in that business segment with the purchase of the Chase Merchants Services division of Chase Manhattan Bank.

In 1982 the corporation changed its name to Continental Telecom Incorporated, adopted a new corporate logo, and inaugurated an advertising campaign around the theme "architects of telecommunications." Continental's expansion into the information services sector continued in 1982 with the purchase of STSC Inc., a computer services supplier; and Cado Systems Corporation, a maker of small business computers. That same year company revenues surpassed the $2 billion mark for the first time.

In 1984 Continental formed the subsidiary Contel Cellular Inc. to handle the corporation's growing cellular operations. A year later, Continental culminated its diversification moves and reorganized into four business sectors: telephone and cellular operations; business systems, offering voice and data processing products and services; federal systems, handling various facets of communication and information systems for government agencies; and information systems, offering telecommunications systems and services to large corporations, institutions, and government entities.

As a result of the company's growing interest in the information services marketplace, in 1985 Continental acquired several computer system and software companies, including Northern Data Systems, Data Equipment Systems Corporation, and Sooner Enterprises, Inc. Continental also purchased Fairchild Industries's interests in American Satellite Co., later renamed Contel ASC, and Space Communications Company.

That same year, Continental sold its directory publishing division, its time-share services business, and its credit card authorization business. In the midst of reorganization in 1985, Napier resigned, and John N. Lemasters, former American Satellite Company president, was named president and chief executive officer.

Continental's telephone operations were repositioned during the mid-1980s through numerous sales and exchanges. Subsidiaries in Nebraska, Colorado, Alaska, the Bahamas, and Barbados were sold, and operations in Michigan were exchanged for similar operations in Indiana and three southern states.

The name Contel Corporation was adopted in 1986. That same year, Contel's new tenant services division set the stage for future growth by acquiring tenant service operations in Atlanta and Seattle. The tenant services division installed and managed customized communications systems in commercial buildings and marketed those systems to the buildings' tenants. Contel also enhanced its information services division with the acquisition of IPC Communications, Inc., a supplier of a special-purpose telephone system used by financial traders, and expanded its federal systems operations with the purchase of Western Union Corporation's government systems division, a provider of information handling systems.

In September 1986 Contel announced it had agreed to merge with Communications Satellite Corporation (Comsat), but by mid-1987 Contel had called off the deal, citing Comsat's unstable financial picture. The failed merger sparked the resignation of Lemasters. Donald W. Weber, former executive vice-president and head of telephone operations, was named Lemasters's successor as president and chief executive officer.

Contel acquired Comsat's international private-line business and its very-small-aperture terminal (VSAT) satellite business in 1987, as well as Equatorial Communications Company, a provider of private satellite data networks. That same year, Contel agreed to sell Executone, its troubled telephone interconnect business, and Texocom, Contel's equipment supply business.

In the late 1980s Contel continued to narrow its focus in the information systems sectors. In 1988 it sold its computer-based business, Contel Business Systems, and a year later disposed of Contel Credit Corporation. Contel Federal Systems continued to grow during that same period, and in 1988 it acquired two Eaton Corporation subsidiaries: Information Management Systems and Data Systems Services. Two years later Contel purchased Telos Corporation, with expertise in government-preferred computer software. Contel's tenant services and cellular businesses also got a boost in 1988 with the acquisition of RealCom Communications Corporation, an IBM tenant services subsidiary, and Southland Mobilcom Inc.'s interests in the Mobile, Alabama, and the Pensacola, Florida, cellular markets.

In 1990 Contel completed the biggest acquisition in its history, a $1.3 billion purchase of McCaw Cellular Communications, Inc.'s controlling interests in 13 cellular markets, which added more than six million potential customers and doubled Contel's cellular potential population market (known in the industry as POPs). While important, that move was eclipsed by the merger with GTE announced later that same year. Through that transition, the two former competitors were expected to integrate telephone and mobile-cellular operations and capitalize on business unit similarities in the field of satellite-communications as well as in communications systems and services targeting government entities.

Over half of Contel's $6.6 billion purchase price, $3.9 billion, was assumed debt. When Charles Lee succeeded James (Rocky) L. Johnson to become CEO in 1992, his first order of business was reduction of that obligation. He sold GTE's North American Lighting business to a Siemens affiliate for over $1 billion, shaved off local exchange properties in Idaho, Tennessee, Utah, and West Virginia to generate another $1 billion, divested its interest in Sprint in 1992, and sold its GTE Spacenet satellite operations to General Electric in 1994.

The long-heralded telecommunications bill, expected to go into effect in 1996, promised to encourage competition among local phone providers, long distance services, and cable television companies. Many leading telecoms prepared for the new competitive realities by aligning themselves with entertainment and information providers. GTE, on the other hand, continued to focus on its core operations, seeking to make them as efficient as possible. In 1992, Lee launched a sweeping reorganization that was characterized by Telephony magazine as "easily one of the nation's largest re-engineering processes."

Among other goals, his plan sought to double revenues and slash costs by $1 billion per year by focusing on five key areas of operation: technological enhancement of wireline and wireless systems, expansion of data services, global expansion, and diversification into video services. GTE hoped to cross-sell its large base of wireline customers on wireless, data and video services, launching Tele-Go, a user-friendly service that combined cordless and cellular phone features. The company bought broadband spectrum cellular licenses in Atlanta, Seattle, Cincinnati and Denver, and formed a joint venture with SBC Communications to enhance its cellular capabilities in Texas. In 1995, the company undertook a 15-state test of video conferencing services, as well as a video dialtone (VDT) experiment that proposed to offer cable television programming to 900,000 homes by 1997. GTE also formed a video programming and interservices joint venture with Ameritech Corporation, BellSouth Corporation, SBC, and The Walt Disney Company in the fall of 1995. Foreign efforts included affiliations with phone companies in Argentina, Mexico, Germany, Japan, Canada, the Dominican Republic, Venezuela and China. The early 1990s reorganization included a 37.5 percent workforce reduction, from 177,500 in 1991 to 111,000 by 1994. Lee's five-fold strategy had begun to bear fruit by the mid-1990s. While the communication conglomerate's sales remained rather flat, at about $19.8 billion, from 1992 through 1994, its net income increased by 43.7 percent, from $1.74 billion to a record $2.5 billion, during the same period.

Principal Subsidiaries: Contel Corporation; GTE Products of Connecticut Corporation; GTE Leasing Corporation; Anglo-Canadian Telephone Company; GTE Holdings (Canada) Limited; GTE International Telecommunications Incorporated; GTE California Incorporated; GTE Florida Incorporated; GTE Midwest Incorporated; GTE North Incorporated; GTE Northwest Incorporated; GTE South Incorporated; GTE Southwest Incorporated; GTE Hawaiian Telephone Company Incorporated; GTE Data Services Incorporated; GTE Finance Corporation; GTE Information Services Incorporated; GTE Intelligent Network Services Incorporated; GTE Investment Management Corporation; GTE main Street Incorporated; GTE Mobile Communications Incorporated; GTE Mobilnet Incorporated; GTE Realty Corporation; GTE REinsurance Company Limited (Bermuda); GTE Service Corporation; GTE Telecom Marketing Corporation; GTE Vantage Incorporated.

Further Reading:

  • Byrne, Harlan S., "Sleepy No More," Barron's, January 16, 1995, p. 15.

  • Bernier, Paula, "AT&T, GI Win Round 1 of GTE's Video Rollout," Telephony, March 13, 1995, p. 6.

  • Gold, Jacqueline S., "GTE: Poor Connection," Financial World, October 26, 1993, p. 19.

  • "GTE's New Twist on Cellular," Electronics, April 25, 1994, p. 1.

  • Klebnikov, Paul, "Techno-Skeptic," Forbes, February 26, 1996, p. 42.

  • Mason, Charles, "Sculpting a New Industry Structure," Telephony, April 19, 1993, p. 88.

  • McCarthy, Thomas E., The History of GTE: The Evolution of One of America's Great Corporations, Stamford, Conn.: GTE Corporation, 1990.

  • Mikolas, Mark, "What Makes Charles Run," TE&M, April 1, 1987.

  • Meeks, Fleming, "'Fail' Is Not a Four-Letter Word," Forbes, April 30, 1990.

  • Welti, Patty, "Dream Job for GTE, IBM," America's Network, January 1, 1996, p. 18.

1978 Early GTE (Sylvania) computer system commercial

1978-early-gte-computer-system-commercial-img-1.jpg HC005S

1978-early-gte-computer-system-commercial.mp4 HC005R

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2018-04-22-youtube-bionic-disco-gte-phone-mart-commercial-1979 HV00EW

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GTE Phone Mart Commercial (1979)

1986 commercial

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GTE "Telenet" ad from 1986

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1988 commercial - Gee. no GTE

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GTE Commercial 1988

Evidence timeline

1935 (Feb 28) -

Full newspaper page : [HN01GW][GDrive]

three names : charles D Kyle / W. Rice Brewster / Albert E Nuelsen

1935 (Mar 21)

Full newspaper page : [HN01GY][GDrive]

1935 (july 23)



1935 (sep 15)





1935 (Dec 19)



1972 (Nov 28) - NYTimes - "Harold V. Bozell Dead at 86; Ex‐Head of General Telephone"

PDF : [HN01F8][GDrive]

LARCHMONT, N.Y., Nov. 27 — Harold V. Bozell, retired president of General Telephone Corporation, which became the General Telephone & Elec tronics Corporation, the second largest telephone company in the world, died today at New Rochelle Medical Center. His age was 86 and he lived at 37 Lincoln Street here.

Mr. Bozell was president of the telephone concern from 1940 to 1951. It changed its name in 1959, following its merger with Sylvania Electric Products, Inc. The company provides telephone service in 34 states, British Columbia, Quebec and the Dominican Re public.

He was born in Beloit, Kan., May 31, 1886, graduated from the University of Kansas in 1908 and earned a master's degree there in 1915.

Joined Yale Faculty in '16

Meanwhile, he served as a professor of electrical engi mooring at the University of Oklahoma and headed its elec trical engineering department. He transferred to Yale Univer sity in 1916 and became as sistant professor of electrical engineering.

While at Yale, he edited Electrical Railway Journal and in 1922 he was made the first editor of Bus Transportation. The following year he was named editor of Electrical World, a McGraw‐Hill publica tion.

During World War I, Mr. Bozell headed various investi gations for a special commit tee of the Naval Consulting Board and was a consulting engineer for the United States Bureau of Standards.

He joined the engineering firm of Bonbright & Co. in 1925. Then, in 1932, as part of a re organization of management of Associated Telephone Utility Company, Mr. Bozell became vice president of that concern. In 1935 he was elected vice president of General Telephone Corporation, which grew out of Associated, and he became its president in 1940.

He retired as president in 1951 but continued for the next 10 years as a director and consultant.

Mr. Bozell was vice president of the Independent Telephone Association from 1947 to 1949 and its president from 1949 to 1950.

In 1970 he was elected to the Independent Telephone Hall of Fame, which was organized in 1965 by the Independent Tele phone Pioneers Association to recognize leaders of the inde pendent (non‐Bell) telephone industry who have made exceptional contributions to the industry's growth and develop ment.

Mr. Bozell was a director of the Beekman‐Downtown Hos pital, the Larchmont Federal Savings and Loan Association, the Northeast Electronics Cor poration and the Roanwell Cor poration.

He leaves his wife, the former Isadel Read Heath, a daughter, Mrs. John B. Forrest, three grandchildren and three great grandchildren.

A funeral service will be held at 8 P.M. Wednesday in the Larchmont Avenue Presbyterian Church. Interment will be private.


Sept. 11, 1985 / By Stephen Engelberg, Special To the New York Times / Source - [HN01FA][GDrive]

The Justice Department today accused the GTE Government Systems Corporation of conspiring to illegally obtain internal Pentagon planning documents, and the company said it would plead guilty.

The company, a leading manufacturer of electronic warfare devices, also said in a statement that it would pay the Department of Defense $580,000 for the costs of the investigation. The Government brought the charge in Federal District Court in Alexandria, Va., The Justice Department said the company had also agreed to develop and enforce a company policy against misuse of classified documents. #3 Individuals Are Charged Officials said the company, of Waltham, Mass., agreed to those conditions to avoid the possibility that it could be barred from bidding on further military contracts. The Department of Defense said, ''The company has terminated the improper conduct and fully understands that any recurrence will subject it to criminal prosecution and debarment.''

In addition, a Federal grand jury in Alexandria today returned indictments against a GTE official, a former company official and the consultant charged with supplying the documents.

The indictment said the documents included the five-year military plan used by the Pentagon in preparing its annual budget request to Congress and ''program objective memoranda,'' in which the military services lay out plans for specific weapon programs. The Justice Department said the company used the documents to make its own plans for marketing electronic warfare equipment to the services.

A Vice President Named

Those indicted were Robert R. Carter of Mountain View, Calif., a former GTE employee who the Justice Department said was marketing manager of the Electronic Warfare Organization of GTE's Western Division; Walter R. Edgington of Annandale, Va., a GTE vice president for marketing who worked in the company's Rosslyn, Va., office, and Bernie E. Zettl, of McClean, Va., a consultant who operated a Northern Virginia company called Zettl Associates.

The company faces a fine of up to $10,000. If convicted, Mr. Zettl could face a maximum sentence of up to 25 years in prison and a $30,000 fine; Mr. Edgington a sentence of 25 years in prison and a $30,000 fine, and Mr. Carter a sentence of five years and a $10,000 fine.

Harvey Greisman, a GTE spokesman, acknowledged that some of the documents involved were classified. But he said, ''The use of such documents was a common industry practice and at GTE Government Systems, they were handled only by persons with appropriate security clearances.''

Method of Removal Sought

Mr. Greisman said the company did not ''condone such activities.''

David Hopkins, the Assistant United Attorney who handled the case, declined to comment when asked whether other companies were under investigation for similar offenses. He said Federal investigators were trying to determine how the documents were removed from the Department of Defense.

The department said the company had agreed to a program to prevent a recurrance of such incidents. Company officers and manager will be required to certify that they have not improperly used or acquired Department of Defense internal documents, the department said.

Mr. Hopkins said the case began when a GTE official was preparing for a routine polygraph, or lie-detector, examination while applying for a higher security clearance. Before being attached to the machine, the employee was asked a series of questions. He admitted mishandling classified documents, according to Mr. Hopkins.

In the indictment, the Department of Justice charged that the documents were used by the company to identify and ''make business preparations for potential contracts in the electronic warfare field and for preparing bids and proposals for contracts with the Department of Defense.''

The indictment said that beginning at least as early as 1978, Mr. Zettl supplied the documents to GTE. They were mailed to a post office box in California, the indictment said, to avoid using the company's interdepartmental mailing system.

The indictment quotes a 1979 memorandum in GTE files that says of its consulting contract with Mr. Zettl, ''We do not want to list on paper the work he is doing.''

The contacts with Mr. Zettl continued at least through 1983, the indictment said.

Mr. Zettl was paid $23,967 in 1979, $18,283 in 1980, $29,236 in 1981, $24,022 in 1982 and $24,000 in 1983 by GTE, the indictment charged. In October 1983 the contract between Mr. Zettl and the company was extended for 13 more months at a rate of $2,000 a month.


Sept. 12, 1985 / By Stephen Engelberg, Special To the New York Times / Source - [HN01FB][GDrive]

A senior Justice Department official said today that the prosecution of a major defense contractor on charges of illegally conspiring to obtain internal Pentagon documents is part of the Reagan Administration's broader, continuing effort to restrict unauthorized use of secret information.

Stephen S. Trott, head of the Department's Criminal Division, said the prosecution of the GTE Government Systems Corporation ''represents a concern on the part of the Administration for protecting closely held information.''

GTE, a major manufacturer of electronic warfare devices in Waltham, Mass., said Tuesday that it would plead guilty to a one-count criminal information filed in Federal District Court in Alexandria, Va., charging it with conspiring to illegally obtain Government documents. A grand jury also charged a consultant hired by the company and a current employee with both theft and espionage. And a former employee was charged with conspiracy.

But GTE argued that the practice of using internal budget documents was commonplace in the defense industry. Justice Department officials agreed that the practice was probably not limited to GTE, which is a unit of the GTE Corporation, based in Stamford, Conn. They said, however, that indictments of other contractors were not imminent and that the purpose of the continuing investigation was to discern who in the Pentagon had released the documents.

Morton H. Halperin, director of the Washington office of the American Civil Liberties Union, said the case marked the first time sections of the United States Criminal Code on either espionage or theft of Government property had been applied to misuse of classified information by a company's officials. In his view, the legal principles the Government seeks to establish could be used to muzzle public debate in newspapers and elsewhere.

Mr. Trott called Mr. Halperin's arguments ''nonsense.'' ''

He said the use of the espionage statute, which has been typically applied to cases in which there is intent to harm the United States, was decided upon in the GTE case only after a long internal debate.

Mr. Trott and others associated with the GTE case said the charges against two of the individuals were brought under both the espionage and theft-of-property sections of the Code because Judge Harrison Winter of the United States Court of Appeals for the Fourth Circuit previously had questioned whether a case involving stolen Government information could be brought under the theft statute.

Prosecutors said they wanted to assure a conviction would not be overturned on appeal.

''I'm really sad we had to do that,'' Mr. Trott said. ''It over-describes the case. This isn't espionage.'' He added: ''We debated this long and hard, and, because of that court decision, we really felt we had no option.''

The espionage section of the Code cited in the two indictments had been applied previously to cases strictly involving spying activities against the United States. Earlier this year, however, the section also was invoked in the indictment of Samuel Loring Morrison, a Defense Department employee accused of taking classified photographs and providing them to a British defense publication.

''The GTE case, coupled with the Morrison case, constitutes an effort to establish an Official Secrets Act, which would make it a crime to publish or report any information which the Goverment says is classified,'' Mr. Halperin of the A.C.L.U. said. Army officials said today that the guilty plea by GTE would not have any effect on the company's effort to win part of a $4 billion Army contract to replace the service's vast networks of battlefield telephones.

Specifically, GTE was charged with conspiring to violate Title 18, Section 641, of the Criminal Code, a statute aimed at those who ''embezzle, steal, purloin or knowingly convert to his own use or the use of another'' any Government property.

Walter R. Edgington of Annandale, Va., a marketing vice president who worked in GTE's Rosslyn, Va., office, and Bernie Zettl, a former consultant to the company, were charged with violating that statute, as well as Section 793, which makes it a crime to misuse information related to the national defense.

Robert R. Carter of Mountain View, Calif., a former GTE employee who the Justice Department has said was marketing manager of the Electronic Warfare Organization of GTE's Western division, was indicted on a single conspiracy count under Section 373 of Title 18 of the Code.

1988 (June 26) - Los Angeles Times - 1984 Incident a Chilling Omen of Fraud Probe - By JOHN M. BRODER

Source - [HN01EG][GDrive]

WASHINGTON — In February, 1984, an agent of the Defense Criminal Investigative Service paid a call on [Walter Roy Edgington (born 1925)], a marketing executive at GTE Government Systems just down the road from the Pentagon. The agent said he was looking into the theft of secret military documents by defense contractors and free-lance consultants.

“You don’t have to explain. I know why you’re here,” Edgington reportedly responded, volunteering that he first saw classified Pentagon documents at GTE shortly after joining the firm in 1966 and had received a steady flow of secret data ever since.

“Every major corporation gets the same material,” the investigator said he was blandly told.

Massive Bribery Inquiry

The GTE case, it now appears, was a chilling portent of the massive Pentagon bribery investigation now unfolding across the country. As the GTE affair demonstrated, the $150-billion-a-year defense acquisition business is so vast, so complicated and so little understood that it offers opportunities for corruption and questionable business practices on a staggering scale.

To understand the dimensions of the Pentagon’s system for acquiring the weapons, trucks, ships, helmets, boots and the thousands of other things needed to project U.S. military power around the world, consider this: Not counting the legions of military and civilian personnel involved in secondary roles, the Defense Department has 50,000 designated contract officers, dealing with 300,000 military suppliers. It grants an average of 62,000 contracts every day.

By themselves, the rules spelling out the way defense contracts are to be sought and awarded are bound into books that occupy--literally--almost a quarter of a mile of shelf space, Pentagon officials say.

And, for the business corporations large and small that seek government contracts, one of the critical elements at every stage of the long procurement process is information, especially advance information that competitors may not have.

What weapons and equipment are the armed forces thinking of obtaining--or cutting back on--in the future? How much money is being budgeted for current procurement of particular items and which programs are winning and which losing in the internal jockeying over funds and policy support?

Most important of all, once competition begins for a particular contract, what exactly does the Navy, or the Army or Air Force, want? What is the nature of the competition? Where is a rival’s bid strong or weak? What clues can be gleaned about its product, its cost structure, manufacturing techniques and other proprietary matters? And what political forces are influencing--or might be brought to bear on--Pentagon decision-makers behind the scenes?

A Tight-Knit Fraternity

The quest for such information, as competitive in its own way as the struggle for contracts, has given rise to a tight-knit fraternity of consultants who know their way around the Pentagon jungle. Many labor diligently within the bounds of established procedures, but federal investigators say that some use payoffs, job promises or other gratuities to get such data improperly from contacts in the military bureaucracy.

The GTE episode offers an instructive primer or case study on how the defense acquisition business works in practice, how that practice sometimes diverges from theory and how easily it can all be corrupted.

It’s a world of Beltway Bandits, Old Crows, rent-a-generals and let-the-buyer-beware--in this case, the buyer being the American taxpayer.

In September, 1985, the Department of Justice indicted GTE, [Walter Roy Edgington (born 1925)], a second GTE executive and [Bernie Edward Zettl (born 1922)], a colorful consultant who allegedly was funneling secret Pentagon papers to the company. GTE pleaded guilty to possession of classified material regarding electronic warfare programs and paid a $590,000 fine. Charges against the two GTE executives were dropped, but the Zettl case is unresolved.

Investigators involved in the case were furious that their superiors stopped the inquiry at GTE and did not allow them to pursue leads implicating at least 25 other major defense contractors and dozens of consultants. One investigator called the GTE case the “tip of the proverbial iceberg” and said the Defense Department and the Justice Department set the current probe back by two years by prematurely ending the earlier inquiry.

The Zettl case also opened a window on a little-known network of electronic warfare specialists known as the Assn. of Old Crows, a 25,000-member organization linking professionals in industry and the military. Zettl was one of the founders of the group, named for a World War II operation that jammed German radar signals.

Retired Military Officers

The Crows, scattered throughout the defense electronics industry worldwide, consist mainly of retired military officers who have moved into high-ranking positions in the major companies that supply sophisticated military jamming, surveillance and communications gear.

The association, based in Alexandria, Va., provides a remarkably efficient system for moving valuable information, officials familiar with the group said. Members, who maintain their contacts in the military and seek to provide their clients or companies with such things as early tip-offs on future Pentagon plans, meet formally and informally throughout the United States, Europe and Asia to swap war stories and industry gossip.

Gus Slayton, the group’s executive director, asserted in an interview that the Old Crows are in no way linked to the present scandal. Only one of the 16 Pentagon officials and private consultants served with search warrants last week is a member, Slayton said, refusing to name him. Numerous executives of the defense firms searched belong to the group.

Secret Documents

According to charges filed in the GTE case, the company went to extraordinary lengths to conceal its possession of classified military documents and their sources. An official of a subsidiary of the firm rented a post office box in California to receive the secret documents obtained by Zettl to keep them out of the regular GTE internal mail system, the indictment said.

The government said GTE paid Zettl, a retired Air Force major, more than $120,000 in consulting fees from 1979 to 1983. A GTE internal memo said Zettl’s connection to the company and his activities were to be kept confidential. “We do not want to list on paper the work that he is doing,” the memo said.

To conceal the true nature of his work, prosecutors charged, Zettl submitted monthly reports “which made only veiled or no reference at all to the documents being provided.”

Zettl Ruined Financially

According to an associate, the publicity surrounding the GTE case ruined Zettl professionally and financially. He is no longer in the defense consulting business, has moved from the Washington area and could not be reached for comment.

Among the documents GTE admitted illegally possessing were sensitive Defense Department budget reports, including program objective memoranda known in Pentagon jargon as POMs (to rhyme with “Moms”) and 5-year defense plans, or FYDPs (pronounced “Fid-ips”).

Access to such internal Pentagon planning documents can prove invaluable to a defense contractor, because they offer a preview of what weapons the military is planning to build, how many of them are likely to be bought and how much money the Pentagon plans to set aside for them.

A former mid-level military purchasing official said that “POM drills"--early reviews of spending priorities in which military officers hammer out internal agreements and compromises on future spending--begin about a year before the Pentagon budget is submitted to Congress. Program officers are literally locked in small rooms, sometimes for days at a time, until agreement is reached on what kind of new amphibious vehicle the Marine Corps needs, for example, or how many new aircraft the Navy wants to buy in the coming year.

All POM discussions and documents are supposed to be confidential, the former official said. But as soon as the meeting breaks up, contractor sales representatives and consultants begin calling the Pentagon, asking whether their favored system made it into the POM and trying to find out how much money was set aside.

It is a time for former military officers who have gone to work for contractors to hit up their buddies for favors, for current military officers to think about their post-retirement plans and for freewheeling consultants to try to make or buy friends who can open the Pentagon’s vaults, the former official said.

“A retired lieutenant colonel, now working for one of the Beltway Bandits, calls a lieutenant colonel still in the service, a guy he’s known for 20 years, and says: ‘What’s going on with this program?’ It’s a daily occurrence during POM drills,” according to the former official, now an industry consultant himself.

Beltway Bandits are Washington-area firms that provide consulting services to government and industry, usually highly specialized. While some do detailed technical and analytical studies, others exist primarily as conduits to the government bureaucracy. They are scattered around the Capital Beltway, a freeway encircling Washington and running through newer Virginia and Maryland suburbs where many of these firms built their offices.

Intelligence Gathering

Within prescribed limits, such intelligence gathering is legitimate--even vital to the government and the defense industry. Companies need good information to make intelligent planning decisions and the Pentagon, for its part, needs strong suppliers well equipped to meet its special needs.

An official of one of the most prominent Beltway Bandits, a firm that does more than $300 million a year worth of studies for the U.S. government and private firms, said that in the last few years a new breed of bandit has sprung up, catering to defense contractors and sometimes operating at the edge of the law.

“I call them boutiques, four-man or five-man outfits, calling themselves ‘marketing representatives.’ I say they’re sleazeballs,” said the official, who asked that his name not be used. “These are usually very small offices. They don’t do anything. They don’t do studies. They don’t sell anything, except information.

“They’re connectors, fixers, who concentrate on the beginning of the process, who can go to their clients and say: ‘The government is interested in buying such and such.’ ”

Among other things, such early notice helps a company decide whether or not to bid on a Pentagon job, in itself often a multimillion-dollar decision. Preparing a bid for a complex weapons system can cost as much as $5 million and involve a project team of as many as 100 company employees, one military procurement specialist said.

‘Rent-a-General’ Firms

A subgroup of these “boutique” consulting houses are the so-called “rent-a-general” firms composed solely of former generals and admirals. Industry will turn to one of these outfits for help on a specific project, knowing that the former officer can pinpoint a colleague still in uniform who is in a position to help the company.

In the current inquiry, for example, prosecutors allege that former Assistant Navy Secretary [Melvyn Robert Paisley (born 1924)] recommended last year that one of his clients, McDonnell Douglas Corp., retain retired Adm. James A. (Ace) Lyons, as a consultant on foreign aircraft sales. Lyons had just left his post as commander of the vast Pacific Command, which gave him access to top Korean military officers who were considering a major purchase of McDonnell Douglas F-18 jets.

Because military assignments rotate on a 2-year or 3-year cycle, a retired flag-rank officer has an incentive to cash in quickly on his connections because his friends will soon be moving on to new duties in the service, one retired officer said.

Once an item survives the Pentagon budget process, it then moves over to Congress, where it passes a number of pressure points that potential contractors or their agents can exploit. The budget first is reviewed by the Senate and House Armed Services committees and their influential staffs. Programs must survive scrutiny in these committees, and friends there can be critical.

Adding and Subtracting

Congress can add as well as subtract weapons from the Pentagon’s recommendations. The Pentagon has tried several times to kill the Midgetman missile, for example, but the House keeps funding it. Individual lawmakers routinely lobby their colleagues to vote for weapons that would be built in their home districts, even those the military does not want.

Many defense sales representatives and independent consultants are former committee staff members who maintain close ties to the staffs and members of the committees. A plea to a congressman for information on a particular project, sweetened with speech fees, campaign contributions and promises of new manufacturing jobs in the district, often yields the desired effect, according to the defense aide of a Senate Armed Services Committee member.

Rep. Roy Dyson, for instance, who prosecutors say is under scrutiny in the current corruption investigation, accepted thousands of dollars in campaign contributions and honoraria for speeches from officials linked to Unisys Corp., a computer and defense electronics firm also under investigation. Dyson, a Maryland Democrat, sits on the House Armed Services Committee and its procurement subcommittee.

The appropriating committees of the House and Senate represent a final step before final votes on funding government projects and are the next access point for contractors. The name of the chairman of the defense panel of the House Appropriations Committee, Rep. Bill Chappell Jr. (D-Fla.), is said by federal law enforcement sources to have come up in the current fraud inquiry, although sources caution that the investigation is in its preliminary phase.

Chappell said last week that he sees as many as 100 defense industry representatives a day.

Basis for Company Bids

If a weapon survives Congress, it goes back to the Pentagon, where procurement officers prepare a Request for Proposals (RFP), a thick document containing the weapon’s specifications and performance requirements that form the basis for company bids. Industry representatives lobby military officials at this stage to get more detailed information on the specs--and sometimes to get them tailored in ways that favor their firm.

Investigators are studying evidence that industry representatives have offered bribes for favorable treatment at this stage too.

The real effort, however, and the key to the current fraud and bribery case that prosecutors are building, comes near the end of the contracting process, the “best and final offer” stage.

After bids are received, Pentagon purchasing officials reject those firms that are not technically capable of carrying out a job and reduce the competition to at most three or four companies. Those firms are asked to submit their final offers, which are evaluated solely on price.

“Now information on what the other guy’s price structure looks like, or what particular hardware piece he’s bidding, any information from his bid can be absolutely decisive,” said an industry consultant familiar with the process.

“The sleazeball gets this key data and might sell the information to one or more of the bidders. He can start a bidding war. Once you’ve lost two or three (competitions) because you played clean, you’re in trouble in your company. The incentive to participate and just not ask questions is very high.

“Once it starts, it spreads like a cancer; it contaminates everybody,” he said

Federal prosecutors are investigating whether top Navy officials sold “best and final offer” data relating to aircraft and jet engine sales to consultants, who passed the information to McDonnell Douglas and United Technologies Corp. These sensitive bidding documents are clearly marked “proprietary” and every industry executive knows he is not supposed to have such data from rival firms, an official familiar with the process said

Investigators are looking at 75 to 100 contracts, 15 major defense firms and about 50 consultants, according to U.S. Atty. Henry E. Hudson

The investigators who interviewed Edgington, the GTE executive, asked him why, knowing that he had unauthorized Pentagon documents and was continuing to receive them, he did not shut off the supply.

According to the agent’s memorandum, Edgington replied: “If you already have your feet in the mud, why take a shower?”

1988 (Dec 21) - Black Market in Classified DOD Documents (CSPAN recording)

Witnesses testified on the investigation report on stolen classified documents and the black market.

1990 (July 13)- NYTimes - "Contel Agrees to Takeover Offer by GTE"

By Barnaby J. Feder ; Source - [HN01D4][GDrive]

In a move that would sharply expand both its local telephone operations and its fast-growing cellular telephone business, the GTE Corporation said yesterday that it had reached a preliminary agreement with the [Contel Corporation] to acquire the Atlanta-based company in a stock swap. The deal would be worth about $6 billion, based on yesterday's closing stock prices.

If the deal is completed and approved by regulatory authorities, GTE, based in Stamford, Conn., would become the fifth-largest local telephone company in the nation, based on number of telephone lines - after the Bell Atlantic Corporation, the BellSouth Corporation, Ameritech and the Nynex Corporation - and its second-largest mobile phone operator, after McCaw Cellular Communications.

''Aside from the obvious synergy of our telephone and cellular operations, both companies have other areas of interest that are remarkably parallel,'' James L. Johnson, GTE's chairman and chief executive, said in a statement. He cited businesses that supply communications systems to governments, satellite communications operations and aggressive programs by both companies to gain a foothold in cable television services.

''It's a great strategic move and very gutsy,'' said Jack Grubman, who follows the telecommunications industry for Paine Webber. ''The bigger you are in this industry, the better off you are. They got the best of the independent companies at a price that will look good in three or four years.''

Investors took a shorter-term view, however. GTE's stock price fell $1.25 a share, to $29.75, in trading yesterday on the New York Stock Exchange. The more than 200 million shares GTE will issue to complete the transaction at an exchange rate of 1.27 GTE shares for each Contel share could dilute GTE's share earnings this year by about 10 percent, analysts said.

Contel shares rose $7.125 to finish at $35.125 a share on the New York Stock Exchange. Charles Wohlsetter, the entrepreneurial 80-year-old chairman of Contel, said that because of GTE's higher stock dividend, Contel shareholders will receive the equivalent of $1.85 a share in dividends for their stock after the deal, a sharp increase from Contel's $1.10-a-share payout.

The proposed deal is one of the largest to date in the telecommunications industry, which has been undergoing a period of consolidation. The MCI Communications Corporation recently bought Telecom USA Inc. for $1.25 billion. In April, GTE agreed to acquire the cellular phone operations of the Providence Journal Company for $710 million, and United Telecommunications Inc. said it would pay $500 million to complete its buyout of GTE's interest in the U S Sprint Communications Company. U S Sprint is the nation's third-largest long-distance enterprise, after the American Telephone and Telegraph Company and MCI.

Earlier this year, McCaw secured its place as the nation's largest cellular concern, based on number of potential customers in its service areas, by paying $3.4 billion for control of the Lin Broadcasting Corporation.

Mr. Wohlsetter and John L. Segall, Contel's vice chairman, will become vice chairmen of GTE and members of its board if the deal is completed. Mr. Wohlsetter would also become chairman of GTE's strategic issues, planning and technology committee. However, the actual roles of both men and of Donald M. Weber, Contel's president and chief executive, at GTE remain to be worked out, said Harvey W. Greisman, a GTE spokesman.

$3.1 Billion is Sales

Contel's attractions for GTE include 2.6 million telephone lines in 30 states, with a far-higher-than-average percentage of its exchanges employing modern digital switches. And Contel has completed a reorganization in which it shed a number of money-losing businesses accumulated during an ill-fated period of diversification. It netted $277 million on revenues of $3.1 billion last year.

Contel Cellular Inc., which is 90 percent owned by the Contel Corporation and 10 percent publicly owned, has franchises in 36 metropolitan areas. The franchises include valuable regions in the Southeast acquired last fall from McCaw for $1.3 billion, making Contel Cellular the seventh-largest cellular business in the nation.

GTE has undergone a wave of restructuring since Mr. Johnson became chief executive in 1988. In addition to phasing out GTE's ownership interest in U S Sprint, Mr. Johnson has shifted headquarters for the local telephone operations to Dallas, begun a drive to reduce employment by 14,000 and reduced GTE's involvement in the development and manufacturing of telephone switches by setting up a joint venture with A.T. &T.

GTE employs 158,000 people and has businesses in 46 states and 41 countries, including local phone companies in Canada and the Dominican Republic that serve 2.3 million customers. In addition to telecommunications, it has a large lighting business. It had net earnings of $1.4 billion on sales of $17.42 billion last year.

1991 (Dec 13) - NYTimes : "BUSINESS PEOPLE; President of GTE Is Named Chairman"

By Anthony Ramirez / Source = [HN01EH][GDrive]

The GTE Corporation yesterday named Charles R. Lee, its longtime president, as its new chairman and chief executive, effective May 1. Mr. Lee has also been a senior officer in the steel, real estate and motion picture businesses.

Mr. Lee, 51 years old, will replace James L. (Rocky) Johnson, GTE's chairman, who retires in May, when he turns 65, the company's mandatory retirement age. Mr. Johnson, who has served with GTE for 43 years, will remain on the board as chairman emeritus.

Based on 1990 revenue of $21.4 billion, GTE is the fourth-largest telecommunications company in the world after British Telecom, Nippon Telegraph and Telephone and the American Telephone and Telegraph Company. GTE earned $1.67 billion, or $1.93 a share, in 1990, up 4 percent from 1989.

Based in Stamford, Conn., GTE had 18.4 million telephone access lines worldwide in 1990, more than 86 percent of which are in the United States. It operates in 40 states, as well as Canada and the Dominican Republic. Earlier this year it announced a new venture in Venezuela.

Mr. Lee, under Mr. Johnson's leadership, was instrumental in GTE's $6.6 billion acquisition earlier this year of the Contel Corporation, a deal that expanded GTE's already large base of local telephone service, as well as service for cellular telephones. GTE is the second-largest carrier of cellular telephones behind McCaw Cellular.

In an interview, Mr. Lee said he planned "as seamless a transition as possible" between Mr. Johnson and himself. He noted that many of the policies of the last few years had been a result of teamwork by Mr. Lee, Mr. Johnson and other senior GTE officials and that he anticipated no major changes in corporate direction.

"We are well on our way to becoming one of the world's great telecommunications companies," Mr. Lee said.

Born in Pittsburgh, Mr. Lee seemed destined to become a steel executive, having come from "the steel capital of the world and proud of it," he said. After majoring in metallurgical engineering, or the shaping and application of metals, at Cornell University and getting his M.B.A. from Harvard University, Mr. Lee joined United States Steel as a manager of business research in 1964.

After six years in that job, he helped in the huge bankruptcy reorganization of the Penn Central Corporation as a vice president.

An executive search firm recruited him as senior vice president-finance, for Columbia Pictures, where he worked for nearly four years. In 1983, shortly after the Coca-Cola Company bought the movie studio, Mr. Lee went to GTE as chief financial officer, where he found a teammate in Mr. Johnson, the chairman.

"He's been the coach and I've been the quarterback," Mr. Lee said.

1997 (May 06) - Wired magazine - "GTE Takes Net Plunge with BBN Buyout"

See [HP004E][GDrive]

The nation's largest local phone company aims to expand its reach by purchasing one of the "backbone" Internet providers.

LEAPING HEADFIRST INTO the deep end of the Internet, GTE said Tuesday that it will purchase Net pioneer BBN for US$616 million, and is partnering with Cisco Systems to develop new data services.

The move helps position GTE, the nation's largest local phone company, as a full-service telecom outlet for corporate clients seeking Internet access and Web-site hosting, as part of its networking strategy. Such all-in-one packaging is seen as crucial to compete in today's increasingly complex and fast-changing telecom industry.

BBN spokesman Vaughn Harring said Tuesday that because his company's network helps account for nearly 80 percent of all traffic on the Internet, the increased capacity resulting from GTE's investment should result in faster service for the typical user. "The resources of a major telecom company were necessary to expand our service," he noted.

BBN has been around since the beginnings of the Net, when the system was still known as the Arpanet. It is considered one of the "backbone" Internet providers, along with MCI, Sprint, and WorldCom's UUNET Technologies.

Besides expanding its range of services offered, GTE is standing firm against AT&T as the leading long-distance carrier makes inroads to local phone customers. For the past two years, BBN has been the provider of networking systems for most of AT&T's Internet service. It is not yet known how the GTE buyout will affect AT&T's WorldNet operation.

AT&T holds a minority stake in BBN, and was believed to be interested in acquiring full control of the company. "Our relationship with AT&T is still being sorted out as a result of this news," Harring said.

GTE already claims some 100,000 subscribers to its Intelligent Network Services ISP. The alliance with Cisco aims to give more substance to this network, and to create new applications and services intended to meet the needs of major clients. GTE said its purchases of Cisco networking equipment for resale could reach more than $1 billion.

This has been an expensive week so far for GTE. On Monday, the company said it will buy a stake in Qwest Communications' coast-to-coast fiber-optic network for $485 million. Because of the acquisitions, GTE said it doesn't expect to meet projected 10 percent earnings increases for this year and next. Beyond 1999, though, the company is hoping that earnings will soar by as much as 15 percent a year.

"We think all this will mean a lot to Internet users across the country," said GTE spokesman Bob Brand. "Clearly we think this is a growth area for us."

GTE will soon commence a cash offer to acquire all outstanding shares in BBN for $29 a share. BBN reported an operating loss of $12.1 million for the quarter that ended on 31 March, compared with an operating loss of almost $30 million a year earlier.

1997 May 07 - GTE / BBN

Full newspaper pages : Page D1 at [HN01EJ][GDrive] , Page D2 at [HN01EL][GDrive]

1997 (Sep 02) - GTE Press Release (archived with Verizon) - "GTE announces the launch of its new operating unit, GTE Internetworking; Internet pioneer BBN Corp. and GTE Intelligent Network Services combine to offer complete Internet Protocol networking services."

Source - [HC004N][GDrive]

IRVING, Texas -- GTE Corp. today announced the launch of GTE Internetworking, its new operating unit. GTE Internetworking includes the recently acquired [BBN Technologies, Incorporated], which 28 years ago developed the ARPANET, the forerunner to today's Internet, and GTE Intelligent Network Services, which provides Internet services to residential and small business customers. The new operating unit will offer Internet services to residential and small business customers and Fortune 500 companies.

The acquisition of [BBN Technologies, Incorporated], and launch of GTE Internetworking are key components of GTE's data strategy, one of a series of steps the company is taking to be a market-leading provider of voice, video and data services.

"GTE Internetworking is uniquely positioned to offer our customers the only complete, integrated Internet services using Internet Protocol (IP) networking technologies," said [George Henry Conrades (born 1939)], corporate executive vice president and president of GTE Internetworking. "We're building upon BBN's technological heritage and capabilities plus GTE's customer base, expanding national footprint and diversified distribution channels. Our mission is to help customers improve their business processes through the integration of IP technologies and telecommunications."

GTE Internetworking will work closely with other GTE units, including GTE Communications Corp., the company's new national sales, service and marketing unit, and GTE Network services, its regulated local exchange carrier.

GTE Internetworking will offer a full spectrum of internetworking services including dial-up and dedicated Internet access, high-performance Web hosting, managed security, network management, systems integration and Web-based application and integration services.

The new division will have responsibility for engineering and combining facilities such as data centers and network infrastructure as well as integrating new capacity on the company's high-speed, fiber-optic network being constructed by Qwest Communications Corp. Additionally, through BBN Technologies, its research and development arm, GTE Internetworking will continue to provide funded research and development services in the area of Internet Protocol networking, security, speech recognition and other advanced technologies.

With revenues of more than $21 billion in 1996, GTE is one of the largest publicly held telecommunications companies in the world. In the United States, GTE offers local and wireless service in 29 states and long-distance service in all 50 states. GTE was the first among its peers to offer "one-stop shopping" for local, long-distance and Internet access services. Outside the United States, where GTE has operated for more than 40 years, the company serves approximately 7 million customers. GTE is also a leader in government and defense communications systems and equipment, directories and telecommunications-based information services, and aircraft-passenger telecommunications.

1997 (Oct 16) - GTE in Fight for MCI; Offers $28 Billion

By JUBE SHIVER JR / Source - [HN01FC][GDrive]

WASHINGTON — Muscling into the biggest takeover battle in history, GTE Corp. offered $28 billion in cash Wednesday for ownership of long-distance giant MCI Communications Corp.

The combination of GTE and MCI would create a telecommunications behemoth with $40 billion in annual revenue and a network that would reach 24 million long-distance and 21 million local customers.

The deal would give GTE the broadest geographic base in the industry, positioning it at the forefront of the booming telecommunications industry, at the same time it has moved aggressively to grab a share of rapidly expanding Internet business.

GTE’s bid comes two weeks after little known Jackson, Miss.-based WorldCom Inc. offered a $29.4-billion stock swap for MCI and an even earlier bid of $20.3 billion in stock and cash from London-based British Telecom.

After saying little about the bidding war around it in recent days, MCI issued a terse statement late Thursday that it would “review all issues and options” involving the competing offers. Some analysts, however, believe the firm may prefer the GTE cash offer, worth $40 per share, to WorldCom’s stock.

GTE would have to borrow massively to afford the deal, though executives denied that the purchase would leave the firm overburdened with debt. As word of the deal leaked out Wednesday, GTE stock fell $2.18 to $48, while MCI shares rose $1.56 to $36.87.

If GTE, headquartered in Stamford, Conn., succeeds in acquiring MCI, the deal would rank as the largest cash deal in history, eclipsing RJR Nabisco Inc.'s $25-billion sale in 1989.

GTE Chairman Charles R. Lee confirmed that his firm was making the offer after stock markets closed Wednesday, saying in a letter to MCI Chairman Bert C. Roberts that it would “bring the benefits of competition to all markets and all customers, both nationally and globally.”

Until recently, GTE, an old-line phone company founded 79 years ago in Wisconsin, had been widely regarded as a slow-moving and lackluster performer in an industry full of mavericks, such as WorldCom. A merger would force GTE to accommodate the flashier, more entrepreneurial style of MCI, whose in-your-face marketing campaigns have provoked scores of industry rivals.

“GTE is not the quickest company to the draw,” said Mark Warner, a telecommunications venture capitalist who ran unsuccessfully for the U.S. Senate in 1996. “If there wasn’t the WorldCom offer blazing the trail, I doubt if they would have made a bid for MCI. . . . They usually operate in a more cautious mode.”

But Lee has been on a campaign to position GTE for a boom in use of the Internet and wireless telephones. During the last year, the company has added about 200,000 Internet subscribers through its $616-million acquisition of Cambridge, Mass.-based BBN Corp., whose computer network forms part of the Internet’s electronic foundation. GTE has also signed up 1.5 million subscribers for its long-distance telephone service.

GTE, the nation’s third-largest local telephone company, offers local phone service in California, Florida, Texas and 24 other states in the Midwest and West.

Unlike the regional Bell operating companies, GTE is in an enviable position of being exempt from regulatory restrictions requiring proof that its local markets are open to competition before entering the long-distance business.

But financial experts, noting that GTE had just $949 million in cash on hand as of June 30, question whether the company can deliver inexpensive, innovative phone service if it has to raise tens of billions of dollars to consummate its offer for MCI.

“The structure of the transaction is likely to debt-laden GTE, which will make it a little bit tougher to compete,” said Thomas H. Sullivan, a partner in the Washington telecommunications law firm of McDermott, Will & Emery.

GTE President Kent Foster rejected such claims, saying the combined GTE and MCI would have huge cash flow--more than enough to price telephone services competitively.

He said the deal would be accomplished “through bank financing and issuing public debt. This is simply another way to structure your debt equity. We will not have any problems generating income.”

GTE is not likely to face insurmountable antitrust objections from federal officials, according to experts. But the company has spearheaded challenges of telephone industry regulation in federal and state courts and could face a potentially hostile review by the Federal Communications Commission.

“From an antitrust point of view, GTE and MCI overall present a fairly favorable competitive picture,” said Leonard J. Kennedy, a veteran Washington communications lawyer, who represents several phone companies. “But they face potentially huge regulatory and political problems since they have been the principal litigant against the FCC and its policies.”

Foster does not believe GTE faces an uphill regulatory battle.

“But I think the regulators will analyze this deal and approve it on its merits because it creates a very powerful competitive situation,” Foster said.

MCI publicly has been supporting British Telecom’s $20.3-billion offer over WorldCom’s competing bid, despite the prospects that its shareholders may vote down the deal. MCI would face financial penalties if it fails to support the BT offer.

“The folks over at MCI have got to be smiling--folks are telling me they are impressed with the GTE offer,” said Jeffery Kagan, who heads his own Atlanta telecommunications consulting firm. “GTE is a very big, strong, profitable local telephone company that could use MCI’s marketing expertise to steamroll into the local telephone markets across the country.”

But consumer advocates cautioned that a GTE-MCI combination could reduce competition, since those companies are battling each other in the local and long-distance markets in California and elsewhere. That could delay the day when consumers see lower prices as competitors offer better deals in order to win customers.

“These companies have been going at each other’s throats trying to get into each other’s markets, and if they merge, that stops,” said Regina Costa, telecommunications research director for TURN, the Utility Reform Network in San Francisco.

The continued upheaval in the $600-billion telecommunications industry has compelled more communications companies to seek out partners that can help erect vast global networks with the capacity to cope with the burgeoning voice, video and data demands of the global Information Age.

Since Congress passed a sweeping reform law in 1996 aimed at spurring phone competition and lowering prices, the industry has been gripped by a wave of consolidation.

The megadeals include the $22-billion merger of Bell Atlantic Corp. and Nynex Corp. and the $15.7-billion combination of SBC Communications Inc. and Pacific Telesis Group. Even GTE was briefly targeted as a takeover candidate by long-distance giant AT&T; Corp.

As a result of GTE’s acquisition earlier this year of BBN Corp., a rival of WorldCom’s UUNet Technologies subsidiary, the combination of MCI and GTE would create a major force on the Internet, with control over a huge portion of the global computer network’s “backbone,” the electronic trunk lines linking Web users from coast to coast in the U.S.

GTE is the second-largest local phone service provider in California.

1997 (Nov 13) - GTE Press Release (archived with Verizon) - "GTE Corp. to acquire Genuity, Inc."

Source - [HC004M][GDrive]

IRVING, Texas - GTE Internetworking, a subsidiary of GTE Corp., today announced that it will acquire [Genuity Incorporated], a subsidiary of Bechtel Enterprises. The terms of the transaction were not disclosed. The acquisition is subject to customary closing conditions, including the expiration of applicable waiting periods under the Hart-Scott-Rodino Act. The acquisition will be completed through GTE Internetworking's affiliate, [BBN Technologies, Incorporated]. It is anticipated that the transaction will be completed by the end of the year.

GTE Internetworking, already a leading provider of Web hosting, is pursuing its strategy of enabling customers to transfer their business applications to the Internet. Moving mission-critical business processes to the Web allows customers to broaden market reach, lower the cost of sales, distribution, and support, and transform the relationships between companies and their customers.

GTE Internetworking has more than a thousand Web hosting customers, including some of the busiest sites on the Web--ZD.Net, Four11, LA Times, Boston Globe, Tribune Corporation, and NBC Interactive. The combination of GTE Internetworking with Genuity will provide an expanded global footprint with 12 fully networked data centers, creating an organization with an unprecedented ability to provide distributed Web hosting services.

Genuity is a value-added provider of distributed application hosting solutions. Genuity has strategically located data centers and a sophisticated load-balancing technology, Hopscotch, which together ensure efficient delivery of data across the Internet. Genuity's unique Hopscotch technology helps solve busy server problems, network congestion, and Internet latency to deliver the highest levels of performance. Its customers include cnet, CMP Publications, Inc., Excite, InterTel, and MCA/Universal.

"With this acquisition we continue to build the critical set of assets necessary to advance our position as a trusted provider of the enabling infrastructure for Internet commerce. We are combining our high-speed national backbone with global reach, robust public and private peering relationships, advanced hosting and distributed application management with our security and systems integration expertise to enable customers to migrate mission critical applications and business processes to the network," said [George Henry Conrades (born 1939)], president of GTE Internetworking.

"Genuity's network technology, and most importantly, its people, are what give us the competitive advantage," said T. Geir Ramleth, president and CEO of Genuity. "The integration of our robust hosting infrastructure and powerful Hopscotch technology with GTE Internetworking's extensive resources will create a synergistic union. And our similar cultures and vision for the future provide a unique opportunity for customers looking to transform their businesses using Internet technology."

"Genuity's robust distributed application hosting architecture will be instrumental to GTE Internetworking as we continue to focus on delivery of the most advanced distributed network-centric solutions," said Mark Shull, vice president and general manager of GTE Internetworking's Network Centric Solutions group. "This combination allows us to build on our existing base of technology and expertise to provide Internet infrastructure services for electronic commerce."

About Genuity

Genuity is a subsidiary of Bechtel Enterprises, the development, financing and ownership affiliate of the Bechtel organization. Genuity is a value-added provider of distributed application hosting, access and security technologies that provide cost-effective, scaleable and highly reliable Internet infrastructure for commercial applications. With headquarters in San Francisco, Genuity also has data centers established in Chicago, Los Angeles, New York, Phoenix, San Jose, Washington, D.C. and London. Genuity is the creator of Hopscotch, a service allowing organizations to ensure the accessibility and performance of their mission-critical Internet sites by eliminating DNS look-up failures and solving Internet latency problems. For more information, please call 1-888-Genuity, or visit the company's World Wide Web site located at Genuity

About Bechtel Enterprises

Bechtel Enterprises, Inc. is the development, financing and ownership affiliate of the Bechtel organization, a premier global engineer - constructor. It is a leader in the privatized infrastructure market, with ownership interests in 9 companies and 29 projects in the power, water, transportation, telecommunications, and technology sectors. Since 1990 alone, Bechtel Enterprises has participated in arranging nearly $12 billion in project financing. For more information about Bechtel please visit the company's World Wide Web site at Bechtel

About GTE Internetworking

GTE Internetworking, a unit of GTE Corporation (NYSE:GTE), includes the recently acquired BBN Corporation, which 28 years ago developed the ARPANET, the forerunner to today's Internet, and GTE Intelligent Network Services, which provides Internet services to consumers and small businesses.

GTE Internetworking offers customers, from consumers to Fortune 500 companies, a full spectrum of Internet services and solutions including dial-up and dedicated Internet access, end-to-end network management, high-performance distributed hosting and applications solutions, managed security, and systems integration, for customers migrating their mission-critical business applications to the Internet. GTE Internetworking draws upon BBN's expertise in funded research and development of advanced technologies, including satellites, digital radio, multi-gigabit routers, security, and speech, and GTE's strong existing telecommunications services, including local and long distance, wireless, paging, video, research, and Internet. The address for the GTE Internetworking's home page is

1998 (Feb 12)

Full newspaper page - [HN01EP][GDrive]

1998 - (May 10)

Full newspaper page - [HN01EU][GDrive]

wow - MCi-Worldcom eventually failed due to a scandal, and were bought by Verizon anyways! Mentioned - William Pelham Barr (born 1950)

See MCI WorldCom Corporation .

1998 (July 28) - CNN - "Bell Atlantic buying GTE : Companies to combine in $52.8 billion stock swap; deal likely to face gov't hurdles"

Source - [HM001D][GDrive]

NEW YORK (CNNfn) - Bell Atlantic Corp. said Tuesday it is buying GTE Corp. in an all-stock deal valued at $52.8 billion, bringing together Bell Atlantic's local and wireless phone service with GTE's local, long-distance, wireless and Internet businesses.

Both companies' boards have approved the acquisition, under which GTE shareholders will receive 1.22 Bell Atlantic shares for each GTE share. Bell Atlantic's Monday closing price of $45 puts the value of the deal at $52.8 billion.

Charles Lee, GTE's chief executive officer, said the transaction reflects GTE's "fierce determination to be a growth company," adding that the newly merged company will build upon GTE's and Bell Atlantic's "complementary strengths."

Investors, however, reacted coolly to the deal, sending GTE (GTE) shares down 3-7/8 to 51-7/8 in mid-afternoon trading. Bell Atlantic (BEL) shares fell 1-3/8 to 43-5/8.

"The deal makes sense from Bell Atlantic's perspective," said Anthony Ferrugia, an analyst at A.G. Edwards. "They're picking up data assets, they're picking up long-distance business - two very strategic assets."

Analysts were not so sure, however, that the deal was quite as positive for GTE because the acquisition values GTE at $55 a share, slightly less than its Monday closing price.

Eric Melloul, telecommunications analyst at Argus Research, told CNNfn the deal represents a bargain for Bell Atlantic, which could open the door for another bidder.

"There is no premium being offered for GTE," Melloul said. "I think someone may come in another month or two [with a higher bid]. I think GTE is worth about $60 to $65 a share."

Both Melloul and Ferrugia cited BellSouth as the leading candidate to step in and make a competing bid for GTE.

A GTE spokeswoman said the deal comes with a breakup fee of up to $2 billion if either company decides to pursue another merger opportunity, which could be another factor involved in Wall Street's negative reaction to the acquisition.

Lee, however, defended the purchase price as a "merger of equals in every way," adding that the newly combined company expects to increase its earnings per share in its first full year following completion of the merger.

"This transaction gets us both where we want to be, but it gets us there faster," Lee said.

Another merger, another FCC inquiry

The companies said they will offer bundled telecommunications services to customers, meaning local, long-distance, cellular and Internet services could be combined on one bill.

"Bundling of telecom services is one of the biggest trends today," said GTE's Lee. "We have an unmatched capability of providing those services to customers … and we can do it at a better cost."

But the deal most likely will come under intense regulatory scrutiny. The Telecommunications Act of 1996 prohibits the Baby Bells from selling long-distance service until they can demonstrate that they have opened their local networks to potential competitors.

"I look forward to reviewing this merger when it comes before us," FCC Chairman William Kennard said in a statement. "I hope the parties will demonstrate how this merger advances the pro-competitive thrust of the Telecommunications Act."

Bell Atlantic has yet to pass this litmus test on its own, although GTE already offers long-distance service outside Bell Atlantic's region.

"Both companies are working on rolling out high-speed access to homes," said Ivan Seidenberg, Bell Atlantic CEO. "By combining our resources, we can drive prices down."

Nonetheless, Melloul said federal regulators likely will seek some kind of concession from the companies.

"If this deal is allowed, they will probably have to operate the long-distance company independently," he said.

Ferrugia, however, said this type of deal typically results in lower rates for consumers in the long run. He told CNNfn that while the telecommunications industry is narrowing to a few big players, the days of a single company controlling the industry are over. [154K WAV] or [154K AIFF]

1998 (Aug 08) - GTE wins Pentagon telecom overhaul pact

BRIAN FRIEL - Source - [HW005L][GDrive]

The Defense Department this week awarded telecommunications giant GTE a 10-year, $110 million contract to overhaul the Pentagon's above-ground telecommunications system.

GTE will be the lead contractor for the Above-Ground Telecommunications Backbone program at the Pentagon, part of DoD's 14-year renovation of the department's 55-year old headquarters. Construction crews are renovating the Pentagon structure in five sections. The first section is expected to be finished in two years. GTE and its 11 subcontractors will design, engineer, test, install and maintain the telecommunications backbone that will wire the Pentagon's five above-ground floors.

The backbone will carry telephone, computer, fax, video and data communications to 135,000 jacks throughout the building, replacing more than 100,000 miles of cables that run through the Pentagon. The backbone will handle both classified and unclassified communications for 24,000 Defense Department employees.

GTE will install the telecommunications system in two five-year phases. DoD expects the Pentagon renovation, which began in 1993, to be complete in 2007. Thousands of Pentagon employees are being relocated to temporary offices at other Northern Virginia sites during the reconstruction.

1998 Aug 09 ... some BBN and Genuity in there too

Full newspaper page : [HN01EN][GDrive]

1999 (June 30) - US Congress (CSPAN) - "Internet and Broadband Issues"

older video of GTE/Verizon with Barr -

"Committee members heard testimony from information industry officials about proposed legislation to regulate the Internet. The legislation would assess the impact of regulation that would impose open access requirements on high speed cable to the Internet and would relax the statutory restrictions on long distance services to allow them to compete for data transmission."

Housatonic.Live2 upload (note this may not remain available, as it is copyrighted on CSPAN) -

1999-06-30-cspan-internet-and-broadband-issues-committee-recording-3hrs.mp4 / .pdf


1999 (July 07) - GTE - BBN - Military contracts - 1999

2000 (April 06) - The Boston Globe

Full newspaper page : [HN01F0][GDrive]

See : Genuity Incorporated (2000) , GTE Corporation , Verizon Communications Incorporated

2000 (April 10) - Network World article / Vol. 17, No. 15 - "GTE, others play the game"

For more than 20 years, Network World has been the premier provider of information, intelligence and insight for network and IT executives responsible for the digital nervous systems of large organizations. Readers are responsible for designing, implementing and managing the voice, data and video systems their companies use to support everything from business critical applications to employee collaboration and electronic commerce

Full pages : Page 01 (cover) : [HP004Q][GDrive] / Page 15 : [HP004R][GDrive]