BELL ATLANTIC AND GTE WILL TIE THE KNOT.(Business)

Bell Atlantic Corp. yesterday won conditional approval to buy GTE Corp. - the region's second-largest local service provider - for $80.8 billion.

The merger creates the nation's largest phone company with more than one-third of local lines and one-quarter of mobile customers. The Federal Communications Commission cleared the purchase, proposed almost two years ago, when the companies crafted a complex plan to comply with rules limiting long-distance traffic. They also agreed to pay fines of more than $1 billion if they fail to meet targets for opening local-phone lines to competition.

The new company, to be known as Verizon Communications, will displace SBC Communications Inc. as the biggest local carrier in the country, with revenue of $58.5 billion last year and service in 31 states, Washington, D.C., and Puerto Rico.

The FCC action is the acquisition's last regulatory hurdle, though the decision could be challenged in court over issues related to GTE's Internet unit, Genuity Inc.

GTE serves about 1 million customers in Washington state, most of them on Seattle's Eastside, in Snohomish County, and up to the Canadian border. Its northwest operations, encompassing Washington, Oregon, Idaho and northern California, are headquartered in Everett. The company employs 4,500 people in the Northwest, most of them in Washington, said spokeswoman Missy Barran.

Bell Atlantic-GTE marks the fourth major consolidation among the seven regional phone companies created in the 1984 breakup of the American Telephone & Telegraph Co. monopoly. Spurred by the 1996 Telecommunications Act that deregulated the industry, Bell Atlantic bought Nynex Corp. in 1997, while SBC acquired Pacific Telesis Group in 1997 and Ameritech Corp. last October.

Shares of New York-based Bell Atlantic closed down $1.50 at $55.06. GTE, based in Irving, Texas, closed down $2.94 at $66.25.

Last year, Bell Atlantic formed a wireless partnership with Vodafone AirTouch PLC, a venture that greatly increased the company's national footprint for cellular phone and paging services. By adding GTE's assets, Bell Atlantic will solidify its lead in the American wireless market with 25 million customers and a wireless footprint covering more than 90 percent of the country. That puts it ahead of its next largest wireless competitor, AT&T, by 14 million customers.

Like other Bell companies carved from the original AT&T megalith, Bell Atlantic has sought to grow since the industry was largely deregulated in 1996.

``I have always thought that the breakup of Ma Bell was only a temporary thing. It created smaller, more powerful companies that needed to have end-to-end capabilities,'' said Alan Alper, an analyst with Gomez Advisors in Lincoln, Mass. Particularly as Americans have begun to embrace wireless services, companies have looked to boost their offerings there, he noted.

Overall, the companies agreed to 25 conditions on their merger with penalties for failure to comply.

This report includes information from P-I staff and Bloomberg News.