DeWine Presses SBC Chief on Cable

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Washington -- Sen. Mike DeWine (R-Ohio) last week pressed
SBC Communications Inc. chairman and CEO Edward Whitacre Jr. to continue Ameritech
Corp.'s push into cable television after the consummation of the two telcos' $62
billion, all-stock merger.

"We want to encourage that. We want to see that
expand," said DeWine, chairman of the Senate Judiciary Subcommittee on Antitrust,
Business Rights and Competition.

Whitacre, while praising Ameritech's efforts, declined
to make any promises.

"I like what I see on the surface. I think that
they've done a nice job with it," he said. "Can I tell you what we would
do? I cannot, because we've haven't completed this merger. Would we give it a
fair look? Absolutely. I like their concept."

To date, Ameritech's cable arm, Ameritech New Media,
has signed up about 100,000 subscribers in 50 communities in Ohio, Michigan, Illinois and
Wisconsin.

DeWine said Ameritech's entry into cable has kept
prices steady in various Ohio markets, while cable retail prices continued to rise where
no overbuild competition existed.

"Ameritech has, in limited areas, provided meaningful
competition to established cable operators," DeWine said. "The net result is
what you would expect from competition: There has been more stability in prices."

Whitacre appeared before DeWine's subcommittee May 19
to defend SBC's acquisition of Ameritech, the one Baby Bell that has moved decisively
into cable. He said SBC needs the deal to become a global player and to launch competitive
local-exchange service in 30 markets outside of its post-merger 13-state territory,
including its $4.4 billion stock deal for Southern New England Telecommunications Corp.

"We are not large enough -- as off-the-wall as that
sounds -- to pull this off," Whitacre said.

DeWine sought Whitacre's assurance that SBC would not
force Ameritech to back away from cable, reminding Whitacre that SBC has shown little
enthusiasm for the video business after a few trials.

At one point in his testimony, Whitacre told DeWine's
panel that SBC was looking to unload the Los Angeles wireless cable system that it
inherited in its acquisition of Pacific Telesis Group.

"We're trying to [sell it]. We've
haven't yet ... It is not a viable competitor," he said.

The 100-plus-channel digital system began operating last
May, and it has signed up approximately 20,000 subscribers.

DeWine was understandably nervous because SBC halted a
video trial in Richardson, Texas, and scrubbed a cable system in San Jose, Calif., after
buying PacTel. And the telco sold its out-of-region cable systems in suburban Washington,
D.C., to a group headed by Prime Cable.

Whitacre indicated that he might be patient with
Ameritech's cable investment because Ameritech's in-region approach was
different from SBC's decision to buy systems outside of its current seven-state
region.

"Ameritech has done it differently: They have done it
in their region. They have done it in an overbuild situation -- an entirely different
concept than what SBC has tried," Whitacre said.

Ameritech chairman and CEO Richard Notebaert said last week
after a speech at the American Enterprise Institute here that he was confident that
Whitacre would be pleased with the company's cable results.

"My prediction is that he will do exactly what I do
every day," Notebaert said. "I look at how we are doing, I look at our 37
percent market share, I look at our return and I say, 'Are we on plan, and how are we
doing?' Right now, we are doing great."

Whitacre was not asked about his plans for SNET's
cable overbuild of Cablevision Systems Corp. in parts of Connecticut.

"What we expect is that they will look at our cable
business with the same scrutiny that we have been applying," SNET spokeswoman Beverly
Levy said.

Meanwhile, Ameritech keeps on snaring franchises. Last
week, Woodhaven, Mich., awarded the telco its 73rd franchise -- 34 of them in Michigan --
to compete against Tele-Communications Inc. The town, located about 10 miles south of
Detroit, has a population of around 12,000, residing in 4,300 homes.

Ameritech has its work cut out in Woodhaven: TCI recently
launched a digital tier of 160 video and 45 audio channels in the area.

In a related matter, Ameritech executives last week
continued to participate in briefings with city administrators in Chicago, where it
anticipates overbuilding TCI on the South Side.

Ameritech's proposal is on the city Board of
Aldermen's agenda for June 10.

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