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PENNSYLVANIA PUBLIC UTILITY COMMISSION VICE-CHAIRMAN RAISES QUESTIONS ABOUT PROPOSED MERGER BETWEEN BELL ATLANTIC AND TCI

 HARRISBURG, Pa., Oct. 13 /PRNewswire/ -- The vice-chairman of the Pennsylvania Public Utility Commission raised several serious questions about the recently announced proposed merger between Bell Atlantic (NYSE: BEL), the parent company of Bell of Pennsylvania, and TCI (NASDAQ: TCOMA), the largest cable telephone operator in the United States.
 Commissioner Joseph Rhodes Jr. stated, "In my opinion, Bell Atlantic must prove to this Commission that they can accomplish this merger without divesting themselves of Bell of Pennsylvania."
 Under a recently passed state law, Bell of Pennsylvania has filed for a radically reformed method of regulation in Pennsylvania. This proposal mandates automatic rate increases for all of Bell's customers. Rhodes warned, "This merger may be the best thing since sliced bread, but if at some future time it goes south, I don't want the average Pennsylvania Bell customer who just wants basic service to be left holding the bag."
 Rhodes added that one alternative to insure that Bell customers are not at risk might be for Bell Atlantic to spin off Bell of Pennsylvania as a stand alone company. "Pacific Telesis, the Bell Atlantic counterpart for the west coast, spun off Pacific Bell for precisely this reason. We have fought to audit Bell Atlantic for four years to determine if Bell of Pennsylvania customers are unfairly subsidizing, for example, Bell Atlantic's efforts at diversification such as its recently announced plans to invest $1 billion in
Mexico. Bell Atlantic has fought this audit at every juncture. Imagine the difficulty we would have to audit a merged Bell Atlantic-TCI. Bell Atlantic shareholders, not Bell of Pennsylvania ratepayers, should bear the risk of this merger."
 The merger raises legal questions that stem from the Cable Communications Policy Act of 1984, 47 U.S.C. Section 533(b). This Act prohibits telephone companies and their affiliates from providing video programming to subscribers within their service areas.
 Bell Atlantic, the parent of Bell of Pennsylvania, recently received a favorable decision in a Virginia federal district court which ruled that the prohibition against telephones in the video market is unconstitutional. However, the ruling is non-binding in Pennsylvania. Thus, Pennsylvania ratepayers may be subjected to constitutionally unjustifiable rates for an acquisition that may not be utilized within the commonwealth of Pennsylvania. The legal authority of the PUC to mandate a divestiture of Bell of Pennsylvania stems from its basic authorizing act (66 Pa. C.S. Section 501) and the Alternative Form of Regulation of Telecommunication Services (Act 67 Section 3009(c)).
 /delval/
 -0- 10/13/93
 /CONTACT: Joseph Rhodes Jr., vice-chairman, of the Pennsylvania Public Utility Commission, 717-783-1197/
 (BEL TCOMA)


CO: Pennsylvania Public Utility Commission; Bell Atlantic Corporation;
 TCI ST: Pennsylvania IN: SU:


JM-MP -- PH025 -- 1752 10/13/93 14:01 EDT
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Publication:PR Newswire
Date:Oct 13, 1993
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