Comcast challenges licensing of firm with Bell Atlantic ties

June 03, 1995|By Bloomberg Business News

PHILADELPHIA -- Comcast Cable Communications Inc. said it has asked the Federal Communications Commission to deny a wireless cable license to Atlantic Microsystems Inc., a subsidiary of a company in which Bell Atlantic is acquiring a stake.

Comcast said the proposed acquisition would put Bell Atlantic in violation of federal rules barring a single company from owning an interest in both wireline and wireless cable systems serving the same community.

Bell Atlantic, which owns the local telephone company serving Maryland, contested the accusations. "There's really no substance to what they're arguing here," said Eric Rabe, a Bell Atlantic spokesman.

In March, Bell Atlantic agreed to make a $15 million loan to CAI Wireless Systems Inc., a wireless cable operator, and obtained the right to buy up to 45 percent of CAI through the exercise of warrants. Those agreements are scheduled to close by the end of the year.

CAI has signed an agreement to buy Atlantic Microsystems, which would give it the right to offer wireless cable mainly in the Philadelphia area.

Comcast argues that the CAI acquisition, and the relationship with Atlantic Microsystems, will give it control of both wired and wireless cable.

"Either Bell Atlantic intends to operate both wireless and wireline cable in the same community -- which is something that the law for bids Comcast or any other company from doing -- or Bell Atlantic intends to shut down its wireless cable network when it has completed its wireline network, which means that there is one less form of video competition in the local marketplace," said Thomas G. Baxter, president of Comcast Cable.

"Neither of these outcomes is pro-competitive," he added.

Bell Atlantic said the investments are an interim measure to allow it to offer wireless cable before the Bell company has upgraded its wired telephone network for cable -- which hasn't happened yet.

Also, plans call for constructing a video dial-tone system that would be open to other service providers, eliminating any chance of a duopoly, the company said.

"They are suggesting something that could happen in the future and, therefore, we shouldn't have the license," Mr. Rabe said.

Comcast said it is requesting that Bell Atlantic shed the license ,, before it enters the wireline cable business.

Comcast Cable Communications Inc. is a subsidiary of Comcast Corp., which provides cable television and telephone services.

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