State regulators have approved a $13-million settlement with GTE Corp. stemming from abusive marketing practices in 1992 and allegations of document shredding and other misconduct by the phone company. The settlement directs GTE to pay $4.85 million to a new PUC Telecommunications Consumer Protection Fund, $100,000 to the Public Utilities Commission for investigation costs and $4.85 million to California's general fund. GTE, whose executives have denied any misconduct, previously paid $3.2 million to nonprofit community groups for consumer protection programs. In other action, the commission agreed to allow Pacific Bell to cut certain phone rates by $13.9 million instead of $47 million. The rate reductions are part of a string of complex adjustments that the PUC hopes will eliminate subsidies that have long been included in phone prices and fees.