Is Bigger Always Better?

The biggest media merger on record is a journey into the unknown--into a world of digital telecommunications, interactive television and telephony.

The mammoth combination of Bell Atlantic Corp. with cable giant Tele-Communications Inc. will result in a company capable of providing information and entertainment through a single wire attached to a small box atop a home TV set. The marriage is attracting great interest--and trepidation in some circles. Combined, Bell Atlantic and TCI will control a huge share of access to an emerging new video world that will have as many as 500 channels and new interactive systems. They venture into territory where rules are unwritten and challenges unknown.

Federal, state and local regulators will review the proposed merger, a plan that is generating many questions:

Is bigger better, more competitive? The merger partners say the combination is “pro-competitive.” An 800-pound gorilla with the muscle and resources of Bell Atlantic and TCI could expedite private development of the information superhighway concept advocated by the Clinton Administration. But the President has yet to say exactly what the concept covers.

Antitrust question: Does the merger put Bell Atlantic in the long-distance business? If so, a waiver is required from the Justice Department because the Baby Bells are barred from the long-distance business under a 1984 agreement between the department and American Telephone & Telegraph Co. that broke up the old Bell system.

What are the implications for software suppliers? For Hollywood and other program suppliers and creators, does the Bell Atlantic-TCI merger put them increasingly at the mercy of those who control the cable and phones lines into homes? And what does this mean for consumers? With cable subscribers already grumbling about the recent rate and billing changes, affordability, access and competition will be major consumer issues. We need answers to all these questions.