Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, April 6, 1994 TAG: 9404060116
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: The New York Times
DATELINE: WASHINGTON LENGTH: Medium
The decision may not necessarily derail AT&T's proposed purchase of McCaw Cellular Communications, but it throws a significant obstacle into the merger plans and is almost certain to delay the agreement from being consummated for at least several months.
The decision was issued Tuesday by U.S. District Judge Harold Greene, who oversaw the Bell System's breakup in 1984 and continues to enforce the antitrust agreement governing the American Telephone & Telegraph Co. and the seven regional Bell companies spun off from AT&T
Greene said Tuesday the AT&T-McCaw deal raised the specter of re-creating the monolithic Bell System, because several of McCaw's cellular networks are partly owned by one or another of the regional Bell companies.
His ruling could force AT&T to restructure the deal by selling several valuable cellular-phone systems - possibly including ones in Los Angeles and Houston - that it had expected to acquire from McCaw.
When the two companies announced their agreement to merge last summer, the news excited the telecommunications industry because it meant the nation's biggest long-distance carrier was acquiring the biggest and arguably most innovative company in the wireless telephone industry. McCaw has 3 million cellular customers and owns systems in 105 markets.
Tuesday's ruling turned on a seemingly technical objection that had been raised by BellSouth Corp., which owns 60 percent of the Los Angeles franchise and slightly less than 50 percent of the Houston system.
McCaw is a minority owner in both systems, through its ownership of 52 percent of Lin Broadcasting.
by CNB