US STUDY DISCUSSES DROPPED COMSAT-CONTEL MERGER
A congressional study today said the
proposed, but now apparently abandoned, merger of the
Communications Satellite Corp <CQ> and Contel Corp <CTC>
would technically be legal but could violate the spirt of the
law setting up COMSAT.
    Two weeks ago before the study was completed, Contel
announced it would seek to terminate the proposed merger.
    The study by the non partisan Congressional Research
Service (CRS) said "the proposed merger appears to comply,
technically, with the mandates or letter of statutes, if may
nevertheless violate the spirit of the law."
    Comsat, created by a 1962 act of Congress, and Contel, a
corporation of local telephone and communications firms, filed
with the Federal Communications Commission last November 3 an
application for merger. Several firms had protested the
proposed merger.
    In an analysis of the law, the research service issued
several critical comments about the structure of the new firm
and said apparent domination by Contel of a restructured COMSAT
would have broken the spirit of the law setting up
COMSAT.COMSAT is the U.S. arm of Intelstat, the international
satellite communications firm. 
 
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