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For cities, communication merger opens door to the unknown.

The announcement of the Bell Atlantic and Tele-Communications, Inc., merger to create the nation's largest cable and telephone service provider has ramifications that will shape the future of every city and town because it will dramatically change the nature of how citizens, government and businesses operate.

If the merger goes through, the new company will have assets of more than $44 billion and would reach into the living room of nearly one out of every four American families. When events have such a great impact on so many individuals they have residual impacts on the local governments that serve those people, too. And those ramifications and far-reaching, and in most cases, not yet completely understandable.

But whatever happens, the coming information infrastructure will affect local taxes, local access to international market-places and local services. It will open up more difficult issues of privacy--both for municipal officials and private citizens.

The cities that understand and anticipate these changes will be world leaders. The cities that anticipate and take advantage of these emerging technologies will find more effective and efficient ways to serve taxpayers and constituents for services such as public safety, traffic coordination, and data transmission.

To put the financial magnitude of this merger into perspective, the asset value is the equivalent of the combined value of more than a dozen years of the federal spending for CDBG. That's just one deal, one merger, yet it is only the first of what is expected to be nearly a revolution over the next decade.

The new company will have 94,000 employees--making it larger than the population of nearly 95 percent of American cities. It would own 1,200 cable systems in 49 states and the District of Columbia.

The merger would represent the first major segment of the so-called "information super-highway" envisioned by the Clinton administration to erect a nationwide network of interactive cable-telephone-computer services connecting cities and citizens in every corner of the country.

For the merger to go through, regulatory approval by the Justice Department, clearance from a number of state utility commissions, and permission from some 1,600 municipal franchising authorities will be necessary. Congress already has scheduled hearings in an effort to determine if the merger would stifle or enhance the economy.

The Administration is trying to figure out what a federal policy should be.

As these decisions are made, local leaders will be challenged to come together to influence the direction of these decisions to insure they reflect municipal priorities and needs.

As the global economy continues to take shape, cities and regions will become focal points for a variety of reasons: location for international business; hub for a telecommunications highway, or a provider of complex microwave networks. These reasons did not even exist a few years back. But they are mounting in their relevence.

Mergers between cable and phone companies and efforts by the Clinton administration to set a federal information superhighway policy could directly affect municipal authority, franchising powers, sales tax revenues, retail development, commuting patterns, and how cities communicate with citizens. The decisions will definitely influence the ability of American cities to compete in the global economy. Federal policy could channel hundreds of billions of dollars worth of private investment into cities in the transformation of how information is relayed within and between cities around the globe.

What do these changes portend for the municipal leaders? How will they reshape cities? How can city leaders interreact with federal policy to insure that municipal concerns are addressed?

The information highway will provide a means to reach into every town hall, home, and business via an electronic highway that can carry data, voice, and video in fast, digital formats--making it possible for any American to access virtually any type of information or entertainment from anywhere. The extraordinarily rapid technological advances are creating explosions of new opportunities in cities for products, services, and new jobs.

The new highway will make it possible for a councilmember to meet directly with constituents at a community center from city hall, for a doctor to direct treatment from thousands of miles away, or for a consumer to look at and ask questions to a merchant without ever leaving the home. By 1998, some analysts predict more than one third of all families in America will have 500 channels on their televisions through the upgrades in technology, giving access to up to 300 pay-per-view movie channels, 20 home shopping channels, and data access and retrieval channels. In almost every case, the channels will be interactive--that is, the consumer or viewer will be able to interact with the sender by voice or data.

So, for instance, an individual could shop from her living room for a video movie, select it, and collect it through a data retrieval system--without ever leaving the living room, without ever driving anywhere, without ever needing a parking lot, a local retail outlet, or a local sales tax.

The changes will impact retailers, affecting property and sales taxes for municipalities. The decreased need for physical travel to shop, or for meetings, or for consultation will affect airports and hotels and downtown office space, affecting commercial property vales and tax assessments.

The explosive growth of the information network will have key economic development affects for cities. As with any infrastructure, rights-of-way will provide critical leverage for cities and towns as the private sector seeks to put in high- capacity fiber and other telecommunications technology. How cities choose to use this leverage will determine new growth plans and economic development in their communities.

The future might be just a phone call away.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Bell Atlantic Corp., Tele-Communications Inc.
Author:Shafroth, Frank
Publication:Nation's Cities Weekly
Date:Oct 25, 1993
Words:932
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