Lost in multi-media hyperspace.

• Author: Hazlett, Thomas W.

The fate of the big, bad monopolist and the big, bad cable-TV law.

WE'VE ALL BEEN READING ABOUT the excitement in telecommunications markets, with mammoth mega-mergers, sprawling joint ventures, incredibly advanced high-tech products, and massive new regulatory laws (such as the Cable Act of 1992) dotting the front page and dominating the business section. Allow me to take you on a brief, two-stop tour of the public-policy landscape. Please keep your limbs on the bus and do not feed the regulators--the dazed and confused animals trying desperately to break into the main exhibits.

Landmark One: Bell Atlantic buys Tele-Communications Inc. for $33 billion.

There was this big, nasty cable company, TCI. It made obscene profits, bought every cable system in sight, ignored the regulations, and pushed around customers, competitors--even city councilmen. When it tried to buy Paramount, a Hollywood studio that Viacom (a smaller cable firm) wanted, it was sued. Vicious allegations were made about TCI's flagrant attempt to monopolize the video business. Its chairman, John Malone, was personally charged with being ruthless in his campaign to control everything in the industry--creation of programs, satellite delivery to cable systems, multi-channel video distribution to consumers.

And then the gargantuan TCI was swallowed whole by Bell Atlantic. Now, picture this event on trial day in Viacom v. TCI: The evil John Malone walks into court and pleads nolo contendre...but begs for the court's understanding. "You see, Your Honor, we at TCI were once an evil monopolist, it is true. We were well on our way to buying up almost everything in cable and controlling what we didn't own through threats and intimidation, just as Viacom alleges. But, Your Honor, we have now been purchased by a competitive telephone company, and the problem is entirely solved." His lawyers rushed the bench with voluminous supporting briefs and documentation.

Mr. Malone's story would be a pure, fat-free slice of regulatory logic. By many standards (including my own), TCI was a monopolist. But by every antitrust standard of the federal government, Bell Atlantic is either competitive or regulated: Its market structure, still under court discretion, is entirely a creature of the 1984 AT&T divestiture, from which it and its six Baby Bell sisters were conceived and born. The idea that the huge, evil monopolist TCI (with over 10 million cable subscribers and pieces of CNN, TNT, BET, WTBS...