Bell vows big outlay if TCI merger OK'd $15 billion would boost jobs, Smith tells Senate panel

WASHINGTON — WASHINGTON -- Raymond W. Smith, chief executive of Bell Atlantic Corp., made a pilgrimage to Capitol Hill yesterday, bearing a $15 billion offering to appease the Senate's antitrust gods.

That is the amount the new Bell Atlantic would spend over the next five years on a national information infrastructure as a result of his company's planned merger with Tele-Communications Inc., Mr. Smith told members of the Senate's antitrust subcommittee.


Thousands of linemen, programmers and splicers would be needed as the company upgraded its network so that TCI could provide phone service and Bell Atlantic could deliver video over its phone lines.

And that, he pointed out, meant jobs in the senators' home states. Especially Bell Atlantic's home state of Pennsylvania, he assured Sen. Arlen Specter, R-Pa.


Yesterday's hearing was a strange form of business-political theater of the sort that only Washington can manage.

Seated beside the Bell Atlantic chieftain was Sumner Redstone, chairman of Viacom Inc., who came to testify that the proposed merger of a regional Bell telephone company and the nation's No. 1 cable TV company would lead to "unchecked monopolies and arbitrary censorship."

He was joined by Martin S. Davis, chairman of Paramount Communications Inc., which recently accepted a Viacom takeover proposal but found itself in a bitter struggle to fend off the unwelcome advances of the QVC Inc. home shopping network, owned in part by a TCI affiliate. The two men denounced the QVC bid as another example of TCI's alleged effort to create what Mr. Davis called "a nationwide cable cartel."

Hovering over the proceedings was the formidable nonpresence of John Malone, TCI's chief executive. Largely ignoring Mr. Smith and Bell Atlantic, Mr. Redstone denounced allegedly monopolistic practices of Mr. Malone and called TCI "the bane of the cable industry and the American cable consumer."

Meanwhile, the senators were plainly disappointed they did not have the opportunity to grill Mr. Malone. Sen. Howard Metzenbaum, the Ohio Democrat who chairs the panel, said Mr. Malone had been invited but was out of the country.

In Mr. Malone's absence, the hearing was dominated by the different personalities and visions of Mr. Smith and Mr. Redstone.

Mr. Smith painted a picture of a bright, competitive future in which the consumer would be free to choose between two or more providers of cable TV and local telephone service.

Mr. Redstone warned that the First Amendment was in danger and that "TCI could end up controlling the news we receive and the contents of our children's schoolbooks."


Mr. Smith gave specific reassurances on the senators' most serious concerns about the merger.

He said Bell Atlantic will spin off all of the TCI cable properties in its own mid-Atlantic region, which includes Maryland. He added the company will not be a subterfuge but a genuine sale to a powerful competitor in the phone and cable arena.

"These companies will be completely separate from the new Bell Atlantic -- no common officers, no common directors and no common employees," Mr. Smith pledged.

Mr. Smith also tried to allay senators' fears, stoked by Mr. Redstone, that the new Bell Atlantic would use the programming capability of TCI's Liberty Media affiliate to shut out other programmers and flood the cables with its own programming. Citing Federal Communications Commission regulations, he HTC pledged that "the networks in our region will be open to all providers of video programming."