Objector at the Wedding

Presiding over the merger marriage of the International Telephone & Telegraph Corp. and the American Broadcasting Cos. into a $2 billion corporation, the Federal Communications Commission approved the union seven weeks ago and allowed a formal exchange of stock. But one day before the merger was effective, the Justice Department behaved like a guest who rises to stop a wedding ceremony when the minister asks for final objections. Justice's antitrust lawyers demanded a postponement and reconsideration of the move because of the possibility of "competitive dangers." Last week, after more hot debate, the commission by a 5-to-2 vote agreed to the postponement.

Despite the vote, the FCC was as irked about the interruption as were ITT and ABC. The Justice Department, the FCC pointed out in its stay order, had been invited to enter the nine-month proceeding at its outset but responded for the first time only seven weeks before the merger was approved. Indeed, said the commission testily, Justice had actually violated the Federal Communications Act by not replying sooner. "If the petition before us had been filed by a private party," said the FCC majority, "it would be denied."

In what is fast becoming an ugly intragovernmental feud over the creation of an electronics and broadcasting giant, the Justice Department insisted that the FCC had violated the law by not holding more complete hearings. Antitrust Chief Donald F. Turner is arguing that the merger may be harmful on at least two grounds: 1) that ITT once intended to create a fourth television network and is buying up the third instead, and 2) that ITT anticipates a tidy cash flow from ABC. ABC lawyers contend that a reverse flow will be more likely: at least $140 million will have to be poured into the network in order to make it competitive in such areas as color telecasting and sports and news coverage.

Granting the stay order last week, the FCC set a tight timetable. The Justice Department was given two weeks to introduce evidence. After that, and after counterarguments are entered by ABC and ITT, the commission will decide whether to reopen the case and reconsider its previous approval. Chances are strong that it will reaffirm the merger. They are equally strong that Justice will then take the whole affair to court.

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