Community Organizations Announce Support for Pacific Telesis -- SBC Merger; Company Pledges to Take Leading Role in Universal Service, Create $50 Million Community Technology Fund When Merger is Complete.

SAN FRANCISCO--(BUSINESS WIRE)--Oct. 15, 1996--Pacific Telesis today joined with more than 100 community organizations in an agreement that creates a 10-year partnership designed to ensure that more of California's neediest residents have access to telecommunications services after the company's proposed merger with SBC Communications is completed.

The partnership agreement outlines a sweeping program to improve the availability of services to ethnic, disabled and low-income customers and to increase levels of charitable giving.

The centerpiece of the partnership is Pacific Telesis' decision to commit to a good faith effort to achieve 98 percent telephone penetration for minority and low-income communities. Another element of the partnership is a new $50 million "Community Technology Fund," to be established by Pacific Telesis and governed by a broad-based committee of community and public interest group leaders and technology experts.

Among the community organizations participating in the partnership and supporting the proposed merger are the Greenlining Institute, Public Advocates, the Universal Service Alliance, the World Institute on Disabilities, the Asian Pacific American Community Partnership, the Hispanic Association on Corporate Responsibility, the African Americans for Telecommunications Equity, the Asia and Pacific Islanders California Action Network, the Los Angeles Urban League, Latino Issues Forum and the Asian, Black and Latin Business Association.

"Pacific Telesis is proud of its history of reaching out to all segments of California society to ensure that they have access to high quality telecommunications services at affordable prices," said Phil Quigley, chairman and chief executive officer of Pacific Telesis. "This new fund will reinforce our commitment to serve those Californians who often do not enjoy full access to the range of communications services that are available to most of us."

Quigley explained that over the last several years, the Telesis Consumer Advisory Panel and community leaders have proposed the establishment of a fund which reinforces commitments to universal service, broadening the existing access base for telephone services to give communities at risk of being underserved access to advanced telecommunications services.

The essential purpose of the Community Technology Fund is "community building," Quigley said, which is focused on the development and deployment of community-based applications of advanced technologies that address the living needs of at-risk and underserved communities. These applications cut across education, health care, economic and small business development, job training, labor market operations, employment and the full range of community services affecting the quality of life and community participation.

"In short, the fund is to facilitate the involvement of a broader spectrum of the society in shaping the applications of the advanced telecommunications system that is evolving," Quigley explained. "These are the emerging markets of California, and we believe it makes good business sense to serve them."

"We fully support this partnership and look forward to the day when SBC can bring this and many other benefits of the merger to Californians," said Ed Whitacre, chairman and chief executive officer of SBC Communications Inc. "Such a comprehensive commitment to the community is in keeping with the values embraced by each SBC employee and demonstrated by the millions of hours of volunteer work they devote to their communities every year."

Leaders of several community organizations which are supporting the proposed merger said the partnership will benefit the underserved communities of California.

John Gamboa, executive director of the Greenlining Institute, said: "Telesis' commitment to set a 98 percent universal service goal for minorities is the heart and soul of this agreement. Minority economic development in California is dependent on linking all Californians together."

"California's low-income, minority, limited-English-speaking and disability communities are California's future wage and tax base, with over half of California's population and a wealth of culture and ideas," said Mark Savage, attorney for Public Advocates. "This agreement represents a visionary step in allowing these communities to compete and contribute equally to California and the Information Age."

Willis White, chairman of the California Black Chamber of Commerce, said: "Minorities don't want trivial 20-cent refunds; we want an empowerment and economic development fund, such as the $50 million education and technology fund proposed by Pacific Bell and community groups."

Gelly Borromeo, editor of Asian Enterprise, said: "The involvement of CEOs Ed Whitacre and Phil Quigley demonstrates the commitment of their companies over the 10-year period of this historic partnership. They're taking a leadership role in stimulating economic development."

"This agreement is an historic piece of public policy," said Jacquelyn Brand, chair of the Universal Service Alliance (USA) and founder and former executive director of the Alliance for Technology Access. "But we all know that one company in a competitive environment cannot go it alone," she said, adding: "It is most encouraging to USA that this pioneering partnership agreement opens the door to a larger partnership of competitors to participate in the community-building that is the essential purpose of the Fund."

"The Asian Pacific American Community is proud to be a full partner in this unprecedented effort to ensure that all Californians benefit from telecommunications technology," said Anni Chung, chair of the Asian Pacific American Community Partnership and executive director of Self-Help for the Elderly. "Pacific Telesis has been a longtime supporter of local communities, and their commitment will be strengthened by the merger with SBC Communications and the formation of a telecommunications fund. A stronger company means greater resources and support for communities that are underserved, underrepresented and in greatest need."

The Community Technology Fund will be used for a variety of purposes, including telecommunications network infrastructure, communications services, customer equipment, training, technical assistance as well as consumer education and advocacy.

The fund also will support creation of a consumer-oriented "think tank" which can conduct research studies addressing the vital interests of underserved communities and the general public.

In addition, Pacific Bell will create a "Universal Service Taskforce" in which community leaders will recommend ways to increase telephone subscribership in underserved communities.

The company also pledged to increase its budget for corporate and foundation grants and gifts by $1 million above its 1996 budget, for the first three years after the merger with SBC is completed, resulting in a total increase in funding of $3 million. The increased funding will be earmarked for grants to groups supporting underserved communities.

Pacific Telesis is challenging other telecommunications companies to contribute to the Community Technology Fund by offering to contribute an additional $3 million to the fund each year for nine years beginning three years after the merger is completed, provided that other California telecommunications providers commit to match or exceed those amounts.

The proposed merger between Pacific Telesis and SBC Communications, announced April 1, 1996, would create a combined company with more than 100,000 employees, revenues of over $21 billion and income of nearly $3 billion. The merger has been approved overwhelmingly by shareholders of both companies, and is expected to be completed in the first quarter of 1997. The CPUC has encouraged Pacific Telesis to work closely with other organizations which have an interest in the merger to address any questions or concerns they may have. This partnership is the result of that process.

Pacific Telesis is a diversified telecommunications corporation based in San Francisco 

CONTACT: Pacific Telesis

Dick Fitzmaurice, 415/394-3764

Linda Bonniksen, 213/975-5061

or

Greenlining Institute

John Gamboa, 415/284-7220

Helen Lie, 415/284-7207

or

Universal Service Alliance

Jackie Brand, 415/456-4243

or

Public Advocates

Mark Savage, 415/431-7130