
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, October 24, 1993                   TAG: 9403180017
SECTION: EDITORIAL                    PAGE: F-3   EDITION: METRO 
SOURCE: By RICK BOUCHER
DATELINE:                                 LENGTH: Long

COMMUNICATIONS COMPETITION

THE ANNOUNCEMENT that Bell Atlantic Corp. will purchase Tele-Communications Inc. is the largest example to date of the convergence which for several years has been occurring in the communications marketplace. The lines that traditionally have separated companies providing telephone, cable television and entertainment services have blurred and within the next few years will vanish altogether. As a result of this convergence, competition will arise in industries that are monopolies today with consequent benefits for consumers of communications services.

The Bell Atlantic-TCI acquisition is a good case in point. Some argue that the acquisition is too big and, therefore, runs counter to consumer interests. In fact, the arrangement is very pro-consumer.

The acquisition occurs within two industries in which there is no competition today. With very rare exceptions, the cable industry operates as a monopoly nationwide. The same is true for the provision of local telephone service. In neither industry does the consumer currently have a choice of providers. Therefore, the acquisition cannot be said to restrict competition and consumer choices.

Moreover, the merger occurs between two companies that are in very different businesses and that will operate in different parts of the nation. Bell Atlantic offers telephone service, and TCI owns cable systems and cable television programming interests. To the extent that TCI owns cable systems in the area in which Bell Atlantic offers telephone service, the cable systems will be divested prior to the finalization of the acquisition. In view of the fact that there is neither business overlap nor geographic overlap, the argument is even stronger that there will be no hindrance to competition.

Some will say that simply because Bell Atlantic will now have access to approximately 40 percent of all American homes through its telephone network or the TCI cable network, it has the potential to monopolize the delivery of information. That argument is also without merit.

In virtually all of those 40 percent of American homes, a second wire owned and controlled by another company provides an avenue for competing services. In the TCI cable region, that second wire is owned and controlled by the incumbent telephone company, and in the Bell Atlantic service territory the second wire is owned and controlled by the incumbent cable system.

Accordingly, the enhanced access which Bell Atlantic will enjoy to American homes will not stifle or monopolize the flow of information.

On the contrary, Bell Atlantic's enhanced access will increase consumer information choices. The company has indicated that as soon as it receives legal permission to do so, it will offer local telephone service over the TCI cable network. Therefore, the merger will provide choices to telephone consumers in TCI's cable territory who have no alternatives to the single-telephone provider today.

The acquisition is prologue to the day when all forms of communication are made competitive. The convergence that is now taking place in the communications industry will eventually eradicate all lines separating the various components of that industry, with the result that by the end of this decade there will be a significant number, perhaps as many as 10, communications companies offering multi-media services.

They will compete with each other nationwide using the local telephone and cable networks to deliver their services. Those local networks will operate as common carrier platforms which, by law, will assure rights of access on equal terms to all information providers. Other providers of information will employ the wireless spectrum and technologies ranging from cellular systems and personal communications devices to direct broadcast satellites to offer voice, video and data services.

And we can be assured that a significant number of providers will be in the market. While some argue that the ongoing convergence will result in a small number of information providers, the likelihood is that a large number will arise.

Under current law, the seven regional Bell operating companies are prohibited from merging. That law should continue to enforce separation among these large telephone companies. To those seven will be added other national, regional and local information providers resulting in a thriving, highly competitive communications business.

The acquisition by Bell Atlantic of TCI clearly positions the combined company to be a leader in the American information marketplace; however, it will by no means be the only multi-media company. It will be one of many offering services on a competitive basis to consumers who today have only one choice.

There are those would seek to maintain the status quo and ensure that consumers over time have no greater choices than they currently have. The more enlightened view is to take down the barriers to competition and encourage the creation of a large number of national companies whose entry into the arena will ensure far greater consumer choice.

Rick Boucher of Abingdon represents the Ninth Congressional District in the U.S. House.

by CNB