Northwestern Indiana Telephone Company - Page 37

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            enforcing the FCC's divestiture orders against NICATV and NITCO.                           
                  In early 1987, the United States brought suit against NICATV                         
            and NITCO in the United States District Court for the Northern                             
            District of Indiana for enforcement of the FCC's divestiture                               
            orders.  These proceedings before the District Court are referred                          
            to for convenience as the enforcement action.                                              

            Constitutional Challenge Action                                                            

                  During the course of the above divestiture action, NICATV                            
            and NITCO later tried to raise certain issues with respect to the                          
            constitutionality of the Communications Act and the FCC's cross-                           
            ownership rules.  The FCC and the Court of Appeals for the                                 
            District of Columbia Circuit, however, essentially held that                               
            these constitutional issues were not properly before them.                                 
            Northwestern Ind. Tel. Co. v. FCC, 872 F.2d at 471-472.                                    
                  On March 24, 1988, Rhys and NITCO filed a declaratory                                
            judgment action against the FCC in the United States District                              
            Court for the Northern District of Indiana, requesting that the                            
            District Court declare unconstitutional an FCC cross-ownership                             
            rule imposed against Rhys.  In the complaint, it was alleged that                          
            Rhys wished to buy shares of stock in NITCO from Mr. Mussman, but                          
            was unable to do so under the FCC’s cross-ownership rules, in                              
            light of his ownership of NICATV.  These proceedings before the                            
            District Court are referred to for convenience as the                                      
            constitutional challenge action.                                                           




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