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Stubborn CEOs and the disparate cultures of Bell Atlantic Corp and Tele-Communications Inc are blamed for the failure of the planned merger of the two companies. The partnership was doomed when negotiations could not resolve concerns over TCI's future cash flow and Bell Atlantic's falling stock price. The companies had planned to invest $15 to $20 billion over five years in the nationwide information highway. Analysts expect the failed deal to result in rival telephone and cable companies pursuing smaller-scale partnerships and technology-sharing pacts rather than complete mergers. TCI and Bell-Atlantic publicly blame the Federal Communications Commission (FCC) for the failure of the deal, and they say they will pursue joint ventures together.

Bell Atlantic Corp's decision to abandon its plans to acquire Tele-Communications Inc may cast a chill on the overheated merger negotiations between cable television and telephone companies, prompting all parties to reevaluate their options. Industry analysts agree, however, that it is unlikely to turn back the tide of the coming digital convergence, for very good economic and technological reasons. Cablevision Systems Corp Chmn Charles F. Dolan, for example, says that telephone companies have a lot to teach cable companies, and vice versa, that is relevant to the task of delivering the interactive telecommunications environment of the future. The Federal Communications Commission's decision to follow up its 1993 order that cable companies lower their rates 10% by mandating an extra 7% rate decrease in Feb 1994 may severely limit the cable industry's ability to pursue its dreams, however.

Bell Atlantic Corp announces on Feb 23, 1994 that it is abandoning plans to acquire Tele-Communications Inc (TCI) due to the Federal Communications Commission's decision to require cable television service providers to reduce their rates. Tele-Communications Inc also releases a statement blaming the FCC for scuttling the deal, and says it will now have to cut its 1994 capital investment plans in half. Yet insiders reveal that intense and unrelenting haggling over the exact price Bell Atlantic would pay TCI for its assets actually doomed the match. The original acquisition agreement called for Bell Atlantic to swap $11.8 billion in stock for TCI's cable-television systems and another $20 billion for all its other assets, such as its equity in cable program providers the Cable News Network and TNT. Bell's stock, valued at $67.625 a share when the acquisition was unveiled, has since fallen below $54, the price it guaranteed to TCI in making the deal.