Ohio PUC to Look at SBC/Ameritech Combo

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Ohio regulators will conduct a public hearing Dec. 9 on SBCCommunications Inc.'s pending acquisition of Ameritech Corp. -- a deal labeled asanti-competitive by cable operators.

In becoming the third Ameritech state to launch such aninvestigation, the Public Utilities Commission of Ohio ordered its staff to prepare areport by Nov. 6, detailing nine key issues regarding the proposed $62 billiontransaction.

Among the aspects of the deal that the report will examineare issues that cable operators believe could affect their industry, including the impacton relations with unaffiliated telecommunications carriers, the market power that thecombined new entity will wield and how consumers will benefit from reported cost savings.

"We believe that the concerns that the cable industrywould like to see fully examined fall under the issues that the PUCO has identified,"said Ed Kozelek, president of the Ohio Cable Telecommunications Association, one of 20organizations intervening in the case.

Ameritech continued to maintain that hearings on a mergerat the holding-company level are unnecessary, but it expressed satisfaction that theagency's "limited" review of the transaction will address long-distanceaccess charges.

"That's a win, because that's exactly thekind of issue brought forward by our competitors that has nothing to do with a merger atthe holding-company level," Ameritech spokeswoman Kim Norris said.

Time Warner Cable, which has often been at odds withAmeritech, wants the commission to consider the market power that a combined SBC/Ameritechwill wield, spokeswoman Mary Jo Green said.

In the past, the two companies have squared off overAmeritech's attempts to promote its Ameritech New Media cable subsidiary by offeringdiscounted local phone service, and over Ameritech giving its cable arm preferential spotsfor pole attachments.

"What will it be like when Ameritech teams up withSBC, an RBOC [regional Bell operating company] known for its heavy-handed opposition tocompetition?" Green asked.

"It's that kind of market power that could impactunregulated services," she added.

Also intervening in the case was Time Warner Telecom, whichoffers competitive phone service to businesses in Columbus and Cincinnati. Officials forthe CLEC (competitive local-exchange carrier) worried that the merger between the twoRBOCs could undermine a hard-fought interconnection agreement with Ameritech that allowsTime Warner Telecom to offer its local phone service.

Kozelek said cable operators are not necessarily asking thePUCO to reject the merger.

"[But] if the PUCO approves the deal, it should do sowith conditions attached that ensure fair play, and that ensure that the merger willpromote competition," he said.

Meanwhile, the proposed merger got a boost last week whenthe Communications Workers of America -- the nation's largest telecommunicationstrade union -- came out in favor of the corporate marriage. Also joining the CWA insupporting the alliance were Compaq Computer Corp., Levi Strauss & Co., Amoco Corp.and Bank One Corp.

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