As filed with the Securities and Exchange Commission on April 19, 1995
Registration No. 33-_____

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________

MERCOM, INC.
(Exact name of Registrant as specified in its charter)

Delaware 38-2728175
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

105 Carnegie Center
Princeton, New Jersey 08540
(609) 734-3700
(Address, including zip code, and telephone number,
including area code of Registrant's principal executive offices)

___________________________

Raymond B. Ostroski Copy to:
Executive Vice President Peter R. Douglas
and General Counsel Davis Polk & Wardwell
105 Carnegie Center 450 Lexington Avenue
Princeton, New Jersey 08540 New York, New York 10017
(609) 734-3700 (212) 450-4000
(Name, address, including zip code,
and telephone number,
including area code, of agent for
service)

___________________________

Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ( )

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. ( )

___________________________

CALCULATION OF REGISTRATION FEE

Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered Per Share Offering Price Fee(2)

Common Stock, par value $1.00 per share 2,393,530 $4.00 (1) $9,574,120 $3,302
Rights 2,393,530 N/A N/A N/A

<FN>
<F1> (1) The proposed maximum offering price per share is estimated solely for
the purposes of calculating the registration fee in accordance with Rule
457(c) based on the average of the bid and ask prices for such shares
($3.75 and $4.25, respectively) on the OTC Bulletin Board on April 18,
1995.
<F2> (2) Pursuant to Rule 457(g), no registration fee is payable with respect to
the Rights since the Rights are being registered in the same registration
statement as the securities to be offered pursuant thereto.

___________________________

The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

PROSPECTUS (Subject to Completion) [LOGO]
Issued April __, 1995

[ ] Shares
Mercom, Inc.
Common Stock
___________________________

Mercom, Inc., a Delaware corporation (the "Company"), is distributing
to holders of record of shares of its Common Stock, par value $1.00 per share
(the "Common Stock"), transferable subscription rights (the "Rights") to
subscribe for and purchase additional shares of the Common Stock for a price
of $[ ] per share (the "Subscription Price"). Such shareholders will
receive [ ] Rights for every [ ] shares of Common Stock held by them as
of the close of business on _________ __, 1995 (the "Record Date"). No
fractional Rights or cash in lieu thereof will be distributed or paid by the
Company. The number of Rights distributed by the Company to each record
holder (a "Holder") of Common Stock will be rounded up to the nearest whole
number. Rights holders may purchase one share of Common Stock for each whole
Right held upon payment of the Subscription Price (the "Basic Subscription
Privilege"). Each Right also carries the right to subscribe (the
"Oversubscription Privilege") at the Subscription Price for additional shares
of Common Stock that are not otherwise purchased pursuant to the exercise of
Rights. See "The Rights Offering--Subscription Privileges--Oversubscription
Privilege." The Rights will be evidenced by transferable certificates. Once a
holder has exercised any Rights, such exercise may not be revoked. There can
be no assurance that the Company will receive any proceeds from the exercise
of the Rights.

The Rights will expire at 5:00 p.m., New York City time, on _________
__, 1995, unless extended (as it may be extended, the "Expiration Date").
Shareholders who do not exercise or sell their Rights will relinquish the
value inherent in the Rights. Accordingly, shareholders are strongly urged to
exercise or sell their Rights. See "Risk Factors--Dilution."

As of April 18, 1995, C-TEC Corporation, a Pennsylvania corporation
("C-TEC"), indirectly owned, through C-TEC Properties, Inc., a Delaware
corporation and wholly owned subsidiary of C-TEC (C-TEC and C-TEC Properties,
Inc. are referred to collectively herein as "C-TEC" except as the context
otherwise requires), 1,044,194 shares of Common Stock, representing 43.63% of
the outstanding Common Stock. C-TEC will receive [ ] Rights in
respect of the shares of Common Stock it owns. C-TEC has informed the Company
that it intends to exercise the Rights it receives for an aggregate
subscription price of $[ ] and that it intends to exercise the
Oversubscription Privilege to purchase at the Subscription Price all other
shares of Common Stock being offered for sale hereby. The opportunity to
exercise the Oversubscription Privilege is available to all holders of Rights
on the same terms. C-TEC does not intend to purchase any additional Rights
through open market purchases or otherwise.

The Common Stock is traded in the over-the-counter market and is
quoted on the OTC Bulletin Board (with such quotes reported in the pink sheets
of the National Quotations Bureau, Inc.) under the symbol "MEEO." It is
anticipated that the Rights will trade in the over-the-counter market and will
be quoted on the OTC Bulletin Board (with such quotes reported in the pink
sheets of the National Quotations Bureau, Inc.) under the symbol "MEEOR."
There can be no assurance, however, that a market for the Rights will develop.
Rights may also be sold in private sales transactions. On April 18, 1995, the
last day on which bid and ask prices were quoted prior to the public
announcement of the Rights Offering, the closing bid price of the Common Stock
on the OTC Bulletin Board was $3.75 per share and the closing ask price of
the Common Stock on the OTC Bulletin Board was $4.25 per share. On ________
__, 1995, the closing bid price of the Common Stock on the OTC Bulletin Board
was $[ ] per share and the closing ask price of the Common Stock on the OTC
Bulletin Board was $[ ] per share. These are inter-dealer quotations, which
do not reflect mark-up, mark-down or commissions and may not reflect actual
transactions. Trading in the Common Stock has been limited and sporadic and
thus does not constitute an established public trading market.

___________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

___________________________

SHAREHOLDERS WHO DO NOT EXERCISE THEIR RIGHTS IN FULL WILL EXPERIENCE
DILUTION IN THEIR RELATIVE PERCENTAGE OWNERSHIP IN THE COMPANY UPON
ISSUANCE OF THE COMMON STOCK TO SHAREHOLDERS EXERCISING THEIR RIGHTS.

___________________________

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
BEFORE MAKING AN INVESTMENT DECISION, POTENTIAL INVESTORS SHOULD CARE-
FULLY CONSIDER THE FACTORS SET FORTH IN "RISK FACTORS"
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS

Underwriting Discounts Proceeds to the
Price to Public and Commissions Company(1)

Per Share.............. $ N/A $
Total.................. $ N/A $
<FN>
<F1> (1) Before deduction of estimated expenses of $[ ] payable by the Company, including registration fees, NASD
review fees, financial advisory, legal and accounting fees, subscription agent fees, information agent fees,
printing expenses and other miscellaneous fees and expenses.

___________________________

The date of this Prospectus is _________ __, 1995.

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Regional
Offices of the Commission located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and Northwest Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material can be obtained upon written
request addressed to the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549, at prescribed rates.

The Company has filed with the Commission a Registration Statement on
Form S-3 (together with any amendments thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock issuable upon exercise of the Rights.
This Prospectus does not contain all the information set forth in the
Registration Statement. Such additional information may be obtained from the
Commission's principal office in Washington, D.C. Statements contained in
this Prospectus or in any document incorporated in this Prospectus by
reference as to the contents of any contract or other document referred to
herein or therein are not necessarily complete, and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or such other document, each such
statement being qualified in all respects by such reference.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed by the Company (File No. 0-17750) with
the Commission pursuant to Section 13 of the Exchange Act are incorporated
herein by reference: (i) the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and (ii) the Company's Proxy Statement
dated April 25, 1995.

All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Common Stock shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which is also deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.

This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. The Company will provide without
charge to each person, including each beneficial owner, to whom a copy of this
Prospectus has been delivered, on the written or oral request of such person,
a copy of any or all documents referred to above which have been incorporated
by reference into this Prospectus except the exhibits to such documents unless
such exhibits are specifically incorporated by reference into the information
that the Prospectus incorporates. Telephone requests for such copies should
be directed to the Information Agent at (212) 929-5500 or (800) 322-2885, or,
if made in writing, to MacKenzie Partners, Inc., 156 Fifth Avenue, 9th Floor,
New York, NY 10010. Such requests may also be directed to Valerie C. Haertel,
Director, Investor Relations at (609) 734-3816 or, if made in writing, to
Mercom, Inc., 105 Carnegie Center, Princeton, New Jersey 08540, attention:
Valerie C. Haertel, Director, Investor Relations.

PROSPECTUS SUMMARY

The following material is qualified in its entirety by the
information appearing elsewhere in this Prospectus and in the documents
incorporated in this Prospectus by reference.

THE COMPANY

The Company is a cable television operator with three cable systems
in Southern Michigan serving 36,183 subscribers as of December 31, 1994 and
one cable system in Port St. Lucie, Florida serving 1,141 subscribers as of
December 31, 1994 (the "Systems"). The Michigan Systems are operated through
the Company's wholly owned subsidiary, Communications and Cablevision, Inc.
("CCV"). The Florida System is operated through a wholly owned subsidiary,
Mercom of Florida, Inc. As of December 31, 1994, the Systems had 37,324
subscribers.

The three Michigan Systems provide cable service to Monroe, Allegan
County and the Coldwater and Sturgis areas. The Florida System serves St.
Lucie West, a planned community in Southeastern Florida, approximately 90
miles north of Palm Beach.

During 1994 and 1993, the Company restructured rates and channel
offerings to comply with the basic rate regulations and to minimize the impact
on revenue of the Cable Television Consumer Protection and Competition Act of
1992 (the "Cable Act"). The future impact of the Act on the Company and the
cable television industry is still unclear. The Company's 1994 operating
results were negatively impacted by the Act. See "Risk Factors--Effect of
Regulation."

The Company's performance is dependent to a large extent on its
ability to obtain and renew its franchise agreements from local government
authorities on acceptable terms. To date, all of the Company's franchises
have been renewed or extended, generally at or prior to their stated
expirations and on acceptable terms. During 1994, the Company completed
negotiations with 10 communities resulting in franchise renewals on terms
which are acceptable to the Company. The Company has 76 franchises, 14 of
which were in the three-year Federal Communications Commission (the "FCC")
franchise renewal window at December 31, 1994. No one franchise accounts for
more than 12% of the Company's total revenue.

Competition for the Company's services traditionally has come from a
variety of providers including broadcast television, video cassette recorders
and home satellite dishes. Technological and regulatory changes are expected
to increase competition. Direct broadcast satellite (DBS), which allows
consumers to receive cable programming for a fee once they purchase or lease a
receiving dish and a set-top terminal, may increase competition in the future.
Two DBS companies have launched their services in 1994. These services are
generally available throughout the country, including areas in which the
Company operates. In addition, recent changes in federal regulation allow
telephone companies to lease their networks to video programmers under the
video dial-tone platform. Also, the current regulatory environment appears to
be fostering competition in cable television directly by telephone companies,
and in telephone by cable companies. Regulation in a competitive environment
is still evolving. The Company continues to monitor the progress of
regulations affecting the telecommunications industry and continually
reassesses its business plans to address future competition. It is impossible
to quantify at this time the negative impact of these technological and
regulatory developments on the cable television industry in general or on the
Company in particular.

As of December 31, 1994, the Company had 42 full-time employees, none of
whom were represented by collective bargaining units.

The Company's principal executive offices are located at 105 Carnegie
Center, Princeton, New Jersey 08540 (telephone: (609) 734-3700).

THE RIGHTS OFFERING

Rights................. Each record holder ("Holder") of Common Stock will
receive [ ] transferable Rights for every [ ]
shares of Common Stock held of record on
__________ __, 1995 (the "Record Date"). The
number of Rights distributed by the Company to each
Holder of Common Stock will be rounded up to the
nearest whole number. An aggregate of
approximately [ ] Rights will be
distributed pursuant to the Rights Offering. Each
Right will be exercisable for one share of Common
Stock. An aggregate of approximately [ ]
shares of Common Stock (the "Underlying Shares")
will be sold upon exercise of the Rights assuming
exercise of all Rights. The distribution of the
Rights and sale of Underlying Shares is referred to
herein as the "Rights Offering." See "The Rights
Offering--The Rights."

Basic Subscription
Privilege............ Rights holders are entitled to purchase for the
Subscription Price one share of Common Stock for
each whole Right held (the "Basic Subscription
Privilege"). See "The Rights
Offering--Subscription Privileges--Basic
Subscription Privilege."

Oversubscription
Privilege............ Each holder of Rights who elects to exercise in full
his or her Basic Subscription Privilege may also
subscribe at the Subscription Price for additional
Underlying Shares available as a result of
unexercised Rights, if any (the "Oversubscription
Privilege"). If an insufficient number of
Underlying Shares is available to satisfy fully all
elections to exercise the Oversubscription
Privilege, the available Underlying Shares will be
prorated among holders who exercise their
Oversubscription Privilege based on the respective
numbers of Rights exercised by such holders
pursuant to the Basic Subscription Privilege. See
"The Rights Offering--Subscription
Privileges--Oversubscription Privilege."

Subscription Price..... $[ ] in cash per share of Common Stock subscribed
for pursuant to the Basic Subscription Privilege or
the Oversubscription Privilege.

Shares of Common Stock
Outstanding after
Rights Offering...... Approximately [ ] shares, based on the number
of shares outstanding on __________ __, 1995 and
assuming exercise of all Rights.

Intent of C-TEC........ C-TEC has informed the Company that it intends to
exercise the [ ] Rights it will receive in
respect of the shares of Common Stock currently
owned by C-TEC for an aggregate subscription price
of $[ ] and that it intends to exercise the
Oversubscription Privilege to subscribe for all
other Underlying Shares. The opportunity to
exercise the Oversubscription Privilege is
available to all holders of Rights on the same
terms. See "The Rights Offering--Subscription
Privileges--Oversubscription Privilege." C-TEC
does not intend to purchase any additional Rights
through open market purchases or otherwise.

Transferability of
Rights The Rights are transferable, and it is anticipated
that they will trade on the over-the-counter
market under the symbol "MEEOR." No assurance can
be given, however, that a market for the Rights will
develop or, if such a market develops, how long it
will continue. See "The Rights Offering--Method of
Transferring Rights."

Record Date............ ________ __, 1995.

Expiration Date........ ________ __, 1995, at 5:00 p.m., New York City time,
unless extended.

Procedure for Exer-
cising Rights........ Basic Subscription Privileges and Oversubscription
Privileges may be exercised by properly
completing and signing the Subscription Certificate
evidencing the Rights (a "Subscription
Certificate") and forwarding such Subscription
Certificate (or following the Guaranteed Delivery
Procedures), with payment of the Subscription Price
for each Underlying Share subscribed for pursuant
to the Basic Subscription Privilege and the
Oversubscription Privilege, to the Subscription
Agent on or prior to the Expiration Date. Any
Rights holder subscribing for an aggregate of more
than 25,000 Underlying Shares pursuant to the
Oversubscription Privilege prior to the Expiration
Date shall not be required to deliver payment for
such number of Underlying Shares in excess of
25,000 until the Expiration Date. The Company, in
its sole discretion, may determine to waive payment
for such number of Underlying Shares in excess of
25,000 subscribed for pursuant to the
Oversubscription Privilege until after the
Expiration Date and after all prorations and
adjustments contemplated by the terms of the Rights
Offering have been effected. If the mail is used
to forward Subscription Certificates, it is
recommended that insured, registered mail be used.
No interest will be paid on funds delivered in
payment of the Subscription Price.

Once a holder of Rights has exercised the Basic
Subscription Privilege or the Oversubscription
Privilege, such exercise may not be revoked.
See "The Rights Offering--Exercise of Rights."

Procedure for Exer-
cising Rights by
Foreign and Certain
Other Shareholders.... Subscription Certificates will not be mailed to
Holders of Common Stock whose addresses are
outside the United States or who have an APO or
FPO address, but will be held by the
Subscription Agent for their account. To
exercise such Rights, such a Holder must notify
the Subscription Agent on or prior to 11:00
a.m., New York City time, on ________ __, 1995,
and must establish to the satisfaction of
the Subscription Agent that such exercise is
permitted under applicable law. If such a
Holder does not notify the Subscription Agent
and provide acceptable instructions to the
Subscription Agent by such time, such Rights
will be sold, if feasible, and the net proceeds,
if any, remitted to such Holder. See "The
Rights Offering--Foreign and Certain Other
Shareholders."

Persons Holding Shares,
or Wishing to Exer-
cise Rights, Through
Others............... Persons holding shares of Common Stock and receiving
the Rights distributable with respect thereto,
through a broker, dealer, commercial bank, trust
company or other nominee, as well as persons holding
certificates of Common Stock personally who would
prefer to have such institutions effect
transactions relating to the Rights on their
behalf, should contact the appropriate institution
or nominee and request it to effect the
transactions for them. See "The Rights
Offering--Exercise of Rights."

Issuance of Common
Stock................ Certificates representing shares of Common Stock
purchased pursuant to the Basic Subscription
Privilege will be delivered to subscribers as soon
as practicable after the corresponding Rights have
been validly exercised and full payment for shares
has been received and cleared. For shares
purchased pursuant to the Oversubscription
Privilege, delivery of certificates will occur as
soon as practicable after the Expiration Date and
after all prorations and adjustments contemplated
by the terms of the Rights Offering have been
effected. See "The Rights Offering--Subscription
Privileges."

Use of Proceeds........ The net cash proceeds received by the Company from
the sale of the shares of Common Stock offered
hereby, after payment of fees and expenses, would
be approximately $8.5 million, assuming full
exercise of the Rights. The Rights Offering is,
however, not conditioned upon any minimum level of
exercise of the Rights, and there can be no
assurance that the Company will raise any proceeds
from the Rights Offering. C-TEC has, however,
informed the Company that it intends to exercise
the Rights it receives for an aggregate
subscription price of $[ ] and that it
intends to exercise the Oversubscription Privilege
to subscribe for all other Underlying Shares. The
opportunity to exercise the Oversubscription
Privilege is available to all holders of Rights on
the same terms. See "The Rights
Offering--Subscription Privileges--Oversubscription
Privilege." C-TEC does not intend to purchase any
additional Rights through open market purchases or
otherwise. The net proceeds, if any, from the
Rights Offering will be used for general corporate
purposes. Specifically, the Company expects that
any such proceeds will be used (i) to repay up to $5
million of outstanding indebtedness to Morgan
Guaranty Trust Company of New York ("Morgan
Guaranty") under a demand note (the "Morgan Demand
Note"), (ii) if additional proceeds remain, to pay
all or a portion of the payment of $1,400,000
to be paid under the Lahey Settlement Agreement
(as defined below) on or before July 1, 1995, (iii)
if additional proceeds remain, to repay up to
$887,000 of outstanding indebtedness to C-TEC under
a demand note (the "C-TEC Demand Note") and (iv) if
additional proceeds remain, for other corporate
purposes including capital expenditures. The Morgan
Demand Note has no stated maturity, is payable on
demand and has an interest rate equal to a base
rate (higher of prime or federal funds rate plus
1/2%) plus 1-3/4%. As of December 31, 1994, the
weighted average effective rate of interest on the
Morgan Demand Note was 10.25%. The C-TEC Demand
Note has no stated maturity, is payable on demand
and bears interest at a rate equal to the weighted
average effective rate charged under the Credit
Agreement (as defined below) for the relevant
period. See "Use of Proceeds" and "Recent
Developments."

Subscription Agent..... The First National Bank of Boston. See "Subscription
Agent."

Information Agent...... MacKenzie Partners, Inc. See "Information Agent."

Risk Factors........... There are substantial risks in connection with this
offering that should be considered by prospective
purchasers. See "Risk Factors."

SELECTED FINANCIAL AND OPERATING INFORMATION

The information as of and for the three fiscal years ended December 31, 1994
has been derived from, and should be read in conjunction with, the Company's
Consolidated Financial Statements for the three fiscal years ended December
31, 1994, which have been audited by independent public accountants and are
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, which report is incorporated by reference in this
Prospectus, and the Company's Consolidated Financial Statements for the three
fiscal years ended December 31, 1993, which have been audited by independent
public accountants and are included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, as previously filed with the
Commission. The information with respect to the fiscal years ended December
31, 1991 and December 31, 1990 has been derived from, and should be read in
conjunction with, the Company's Consolidated Financial Statements for the
three fiscal years ended December 31, 1993, 1992 and 1991, which have been
audited by independent public accountants and are included in the Company's
Annual Reports on Form 10-K for the fiscal years ended December 31, 1993, 1992
and 1991, respectively, as previously filed with the Commission.

Summary Financial and Operating Data
(dollars in thousands except per share and operating data)

Year Ended December 31,
----------------------------------------------------------------------------
1990 1991 1992 1993 1994
------------ ------------ ------------ ------------ ------------

Consolidated Statement of Operations Data:
Sales......................................... $9,667 $11,041 $11,986 $12,606 $12,927
Operating income before depreciation
and amortization............................. 3,256 3,588 4,790 5,116 5,052
Depreciation and amortization................. 2,977 3,329 3,399 3,219 3,010
Operating income.............................. 279 259 1,391 1,897 2,042
Interest Expense. . . . . . . . . . . . . . 2,262 3,299 2,731 2,132 2,067
(Loss) before income taxes.................... (3,483) (9,606) (1,144) (219) (662)
Provision (benefit) for income taxes.......... (1,132) (1,822) -- 17 (4)
(Loss) before cumulative effect of
change in accounting principle............... (2,351) (7,784) (1,144) (236) (658)
Net (loss).................................... (1,103) (7,784) (1,144) (236) (658)
Net (loss) per share.......................... (0.94) (3.25) (0.48) (0.10) (0.27)
Balance Sheet Data:
Cash and temporary cash investments........... 115 226 376 989 96
Total assets.................................. 30,557 26,657 23,873 22,244 19,823
Total debt.................................... 29,281 30,200 29,847 28,184 25,926
Common shareholders' capital deficiency....... (3,374) (11,158) (12,302) (12,538) (13,196)
Operating Data:(1)
Homes passed(2)............................... 57,736 58,726 59,988 61,730 63,721
Basic subscribers(3).......................... 32,319 33,692 34,118 34,714 37,324
Basic subscribers as a
percentage of homes passed................... 56.0% 57.3% 56.9% 56.2% 58.6%
Tier subscribers(4)........................... 32,299 33,122 32,814 32,945 34,789
Tier subscribers as a
percentage of basic subscribers.............. 99.9% 98.3% 96.2% 94.9% 93.2%
Premium service units(5)...................... 16,593 15,324 12,762 12,816 14,312
Premium service units as a
percentage of basic subscribers (pay to
basic ratio)................................. 51.3% 45.5% 37.4% 36.9% 38.3%
Average revenue per subscriber for
the month of December(6)..................... $27.64 $27.60 $30.05 $29.70 $29.36
<FN>
<F1> (1) Unaudited.
<F2> (2) A home is deemed to be "passed" by cable if it can be connected to the
distribution system without any further extension of the distribution
plant.
<F3) (3) A home with one or more television sets connected to a cable television
system is counted as one basic subscriber.
<F4> (4) A home with one or more television sets receiving both basic and tier
service is counted as one tier subscriber. Tier service is not available
in the St. Lucie System.
<F5> (5) A basic subscriber may purchase more than one premium service, each of
which is counted as a separate premium service unit. As a result, the
pay-to-basic ratio can exceed 100%. A premium service unit includes only
single channel services offered for a monthly fee.
<F6> (6) Calculated by dividing total cable related revenues for the month of
December by the number of basic subscribers at the end of the month.

RISK FACTORS

The Common Stock offered hereby involves a high degree of risk. Each
prospective purchaser should carefully examine all of the information
contained in this Prospectus and should give particular consideration to the
following risk factors:

Net Losses

The Company has experienced net losses since 1989 and may incur net
losses in the future. The Company incurred losses of $658,000, $236,000,
$1,144,000, $7,784,000 and $1,103,000 for the years ended December 31, 1994,
1993, 1992, 1991 and 1990, respectively. There can be no assurance as to
when, if ever, the Company will recognize a net profit.

Going Concern Risks

The Company's independent auditors have expressed substantial doubt
about the Company's ability to continue as a going concern unless the debt and
equity of the Company are restructured. The Company has suffered recurring
losses and has a shareholders' capital deficiency. The existing debt and
equity structure of the Company is not adequate to provide resources for the
viable operation of the business. The Company does not have liquid assets to
repay its outstanding obligations. Additionally, the Company has no available
lines of credit or other significant sources of liquidity.

The Company had total outstanding debt of $25,926,000 at December 31,
1994, consisting of $5,000,000 due under the Morgan Demand Note and
$20,926,000 due under a Credit Agreement with Morgan Guaranty dated November
1989 and amended in April 1990, December 1992, December 1993 and December 1994
(as amended, the "Credit Agreement"). In each of the last three years, the
Company has been unable to make scheduled principal payments in respect of
such indebtedness and has had to reschedule those payments. Based on its
latest financial projections, the Company will not be able to make the
principal payments of long term debt as scheduled for 1995. C-TEC loaned
$887,000 to the Company on March 31, 1995 to enable the Company to make the
principal payment of $887,000 scheduled for that date under the Credit
Agreement. The loan from C-TEC is evidenced by the C-TEC Demand Note. The
Company and Morgan Guaranty are working toward a mutually acceptable
restructuring of the debt and/or equity of the Company and are reviewing
available options, which include the sale of assets, the raising of equity and
the issuance of subordinated debt, among other things. There can be no
assurances that the Company will be able to successfully restructure its debt
and equity or that C-TEC would provide any additional debt financing to the
Company. See "Recent Developments."

Further, the Company has substantial liability under the Lahey
Settlement Agreement. See "Risk Factors--Lahey Litigation." Additionally,
previous deferrals of capital expenditures due to the significant
uncertainties regarding adequacy of working capital, along with the
negative effect regulation will have on future rate increases and operating
expenses (see "Risk Factors--Effect of Regulation") will adversely affect
future operating income.

The Company is undertaking the Rights Offering in order to restructure
its debt and equity. Although the Company believes that if all Rights are
exercised the proceeds to the Company should be sufficient to protect the
viability of the Company in the near term, there can be no assurances in that
regard. Moreover, there can be no assurance that the Company will raise any
proceeds from the Rights Offering. See "Risk Factors--Indefinite Amount of
Proceeds."

Lahey Litigation

CCV, a subsidiary of the Company, is party to a lawsuit commenced in
1988 in the Circuit Court for the County of Ottawa, Michigan, relating to
termination of Kenneth E. Lahey as president of CCV. Mr. Lahey asserted that
as a result of the termination he is entitled to an amount equal to the
fair market value of 10 percent of the outstanding shares of CCV stock (the
"Lahey Interest"). The trial court determined that Mr. Lahey was entitled
to an amount equal to the fair market value of the Lahey Interest and
ordered, among other things, that an appraisal proceeding be held to
determine such fair market value. The Company appealed such order, but the
Michigan Court of Appeals upheld the trial court's decision on December 27,
1993. On December 16, 1994, a panel of three appraisers ("Panel") rendered
a decision in favor of Mr. Lahey in the amount of $2.949 million. The
Company requested the Circuit Court for the City of Ottawa to remand this
proceeding back to the panel for further consideration of certain factors
which were not included in their decision on December 16, 1994. A hearing
was held on January 16, 1995 before the Circuit Court for the City of
Ottawa. The Court issued an Opinion on February 14, 1995 denying the
Company's motions and sustaining the decision of the Panel in the amount of
$2.949 million and awarded pre-judgment interest in the amount of
approximately $1.2 million. The Company filed a Motion for Reconsideration
with the Court. On March 27, 1995, the Court issued an Order denying the
Company's Motion for Reconsideration.

On April 18, 1995, Mr. Lahey and the Company entered into a
Settlement Agreement and Mutual Release (the "Lahey Settlement Agreement")
pursuant to which the Company has agreed to cause CCV to make payments
totaling $4.3 million in full satisfaction of all claims Mr. Lahey may
have had against the Company or its affiliates. The payment schedule
under the Lahey Settlement Agreement is as follows: (i) $100,000 upon
signing of the Agreement, (ii) $1,400,000 on or before July 1, 1995 and
(iii) $700,000 on or before July 1, 1996, 1997, 1998 and 1999. The initial
payment of $100,000 has been paid. C-TEC has agreed to ensure
that the payment of $1,400,000 due on or before July 1, 1995 is
paid. The Company had accrued approximately $4.4 million as of December
31, 1994, representing management's best estimate of the Company's
potential liability in respect of this matter.

Dividend Policy and Restrictions

The Company has not paid dividends in recent years due to the Company's
financial condition and does not expect to pay dividends in the foreseeable
future. In addition, the Credit Agreement prohibits the payment of dividends
on the Common Stock.

Indefinite Amount of Proceeds

Highly Competitive Industry

The cable television industry is highly competitive. Competition for
the Company's services traditionally has come from a variety of providers
including broadcast television, video cassette recorders and home satellite
dishes. Technological and regulatory changes are expected to increase
competition. Direct broadcast satellite (DBS), which allows consumers to
receive cable programming for a fee once they purchase or lease a receiving
dish and a set-top terminal, may increase competition in the future. Two DBS
companies have launched their services in 1994. These services are generally
available throughout the country, including areas in which the Company
operates. In addition, recent changes in federal regulation allow telephone
companies to lease their networks to video programmers under the video
dial-tone platform. Also, the current regulatory environment appears to be
fostering competition in cable television directly by telephone companies, and
in telephone by cable companies. Regulation in a competitive environment is
still evolving. The Company continues to monitor the progress of regulations
affecting the telecommunications industry and continually reassesses its
business plans to address future competition. It is impossible to quantify at
this time the negative impact of these technological and regulatory
developments on the cable television industry in general or on the Company in
particular.

Effect of Regulation

The Company, like other operators of cable television systems, is
subject to regulation at the federal, state and local levels. Many aspects of
such regulations are currently the subject of judicial proceedings and
administrative or legislative proceedings or proposals. On October 5, 1992,
Congress passed the Cable Act, which regulated certain subscriber rates and a
number of other matters in the cable industry, such as mandatory carriage of
local broadcast stations and retransmission consent, and which will increase
the administrative costs of complying with such regulations. The most
significant provision of the Act requires the FCC to establish rules to ensure
that rates for basic services are reasonable for subscribers in areas without
effective competition as defined in the Cable Act. Few municipalities served
by the Company are subject to effective competition.

The FCC's initial rules regulating cable television rates were effective
September 1, 1993, and revised rate regulations were effective May 15, 1994.
The Company restructured its rates and channel offerings in 1993 and 1994 to
comply with these rules and minimize the negative impact on revenues. The
Company has either settled challenges or accrued for anticipated exposures
related to the initial rate regulation rules which were effective September 1,
1993. The Company's 1994 statement of operations includes charges aggregating
approximately $150,000 relating to cable rate regulation liabilities. The
Company in 1994 also reduced rates charged for converters and remotes to
comply with FCC rate regulations which require cable operators to charge for
equipment at cost plus a reasonable profit. The Company believes that it is
in compliance with the amended rate regulation provisions which were effective
May 15, 1994; however, there is no assurance that there will not be challenges
to its restructured rates.

The Company anticipates that certain provisions of the Cable Act that do
not relate to rate regulation -- such as the provisions relating to
retransmission consent and customer service standards -- will reduce the
operating margins of the Company.

No assurance can be given at this time that the above matters will not
have a material adverse effect on the Company's business and results of
operations in the future. Also, no assurance can be given as to what other
future actions Congress, the FCC or other regulatory authorities may take or
the effects thereof on the cable industry in general or the Company in
particular.

Franchise Renewals

The Company's performance is dependent to a large extent on its ability
to obtain and renew its franchise agreements from local government authorities
on acceptable terms. To date, all of the Company's franchises have been
renewed or extended, generally at or prior to their stated expirations and on
acceptable terms. During 1994, the Company completed negotiations with 10
communities resulting in franchise renewals on terms which are acceptable to
the Company. The Company has 76 franchises, 14 of which were in the
three-year FCC franchise renewal window at December 31, 1994. No one
franchise accounts for more than 12% of the Company's total revenue.

Significant Influence of Principal Shareholder

C-TEC, through its wholly owned subsidiary C-TEC Properties, Inc., a
Delaware corporation, owns approximately 43.63% of the outstanding shares of
Common Stock, and C-TEC nominees constitute a majority of the Board of
Directors of the Company. In addition, the Company has entered into a
Management Agreement dated January 1, 1992 (the "Management Agreement") with
C-TEC Cable Systems, Inc., a Delaware corporation and wholly owned subsidiary
of C-TEC ("CCS"). Through its ownership of Common Stock and its
representation on the Board of Directors of the Company, and as a result of
the existence of the Management Agreement, C-TEC has significant influence
over the management and operations of the Company. C-TEC's substantial
ownership interest in, and significant influence over, the Company may tend
to deter nonnegotiated tender offers or other efforts to obtain control of the
Company and thereby preclude shareholders from having the opportunity to sell
shares at prices higher than those otherwise prevailing.

Assuming that all Holders exercise their Rights pursuant to the Basic
Subscription Privilege, the ownership interest of C-TEC in the Company will
not be reduced as a result of the Rights Offering. If (i) in accordance with
its stated intention, C-TEC exercises its Rights and oversubscribes for all
other Underlying Shares and (ii) no other Holders exercise their rights, C-TEC
will own [ ]% of the Common Stock after the Rights Offering.

The Management Agreement provides that the Company will pay CCS: (a) an
annual fee equal to the greater of (i) $500,000 or (ii) a percentage of the
Company's annual revenues (ranging from 5% of $10 million of revenues, as
defined, to 4% of revenues in excess of $20 million); and (b) an annual
incentive bonus equal to 25% of the Company's earnings before interest,
depreciation, amortization and taxes ("EBIDAT") as adjusted, during the
applicable fiscal year less the base year EBIDAT of $3.85 million. During
1994, CCS earned management and incentive fees of approximately $1.1 million
pursuant to the Management Agreement.

Relationship with C-TEC; Conflicts of Interest

C-TEC owns and operates cable television systems and is engaged in other
aspects of the telecommunications industry. Certain persons serve as officers
or directors of the Company and as officers or directors of one or more of
C-TEC and its controlling entities. Additionally, the entities that control
C-TEC also control MFS Communications Company, Inc. ("MFS"), which provides a
variety of telecommunications services, primarily over its digital fiber optic
telecommunications networks. These relationships may lead to conflicts of
interest. Potential conflicts of interest will be dealt with on a
case-by-case basis taking into consideration relevant factors including

prevailing corporate practices. The Company has established an Affiliate
Transaction Review Committee of the Board of Directors to evaluate certain
transactions in which a potential conflict of interest may be involved.

All of the Company's executive officers are officers of C-TEC. The
executive officers of the Company devote a majority of their time and
attention to the business and affairs of C-TEC.

Uncertain Market for Rights and Common Stock

No assurances can be given regarding whether an active trading market
for the Rights will develop and, if one does develop, how long it will
continue or the prices at which the Rights will trade from time to time in
relation to the Common Stock. Moreover, because the Rights are new
securities, the trading markets, if any, for the Rights may be volatile.
There also can be no assurance that the shares of Common Stock issuable upon
exercise of the Rights will trade at or above the Subscription Price. There
is currently only a limited public market for the Common Stock. The Common
Stock is traded in the over-the-counter market and is quoted on the OTC
Bulletin Board (with such quotes reported in the pink sheets of the National
Quotations Bureau, Inc.). Holders who purchase Common Stock pursuant to the
Rights Offering may have difficulty selling their Common Stock due to a lack
of an active trading market.

Dilution

Holders who do not exercise their Rights will experience a decrease in
their proportionate interest in the equity ownership and voting power of the
Company. The sale of the Rights may not compensate a holder for all or any
part of any reduction in the market value of such shareholder's Common Stock
resulting from the Rights Offering. Shareholders who do not exercise or sell
their Rights will relinquish any value inherent in the Rights. Accordingly,
holders are strongly urged to exercise or sell their Rights.

The Subscription Price per shares of Common Stock exceeds the net
tangible book value per shares of Common Stock, which is negative.
Accordingly, the purchasers of the Common Stock in the Rights Offering will
experience immediate and substantial dilution. See "Dilution."

Based on the 2,393,530 shares of Common Stock outstanding as of March
31, 1995, the consummation of the Rights Offering would result (on a pro forma
basis as of such date and assuming no additional Rights are issued as a result
of rounding the number of Rights distributed to holders up to the nearest
whole number) in an increase of [ ] shares of Common Stock
outstanding.

Market Considerations

There can be no assurance that the market price of the Common Stock will
not decline during the period the Rights are outstanding or that, following
the issuance of the Rights and the sale of the Underlying Shares upon exercise
of Rights, a subscribing Rights holder will be able to sell shares purchased
in the Rights Offering at a price equal to or greater than the Subscription
Price. Once a holder of Rights has exercised the Basic Subscription Privilege
or the Oversubscription Privilege, such exercise may not be revoked. Moreover,
until certificates are delivered, subscribing Rights holders may not be able
to sell the shares of Common Stock that they have purchased in the Rights
Offering. Certificates representing shares of Common Stock purchased pursuant
to the Basic Subscription Privilege will be delivered as soon as practicable
after the corresponding Rights have been validly exercised and full payment
for the shares has been received and cleared. For shares purchased pursuant
to the Oversubscription Privilege, delivery of certificates will occur as soon
as practicable after the Expiration Date and after all prorations and
adjustments contemplated by the terms of the Rights Offering have been
effected.

No interest will be paid to Rights holders on funds delivered to the
Subscription Agent pursuant to the exercise of Rights pending delivery of
Underlying Shares.

USE OF PROCEEDS

The net cash proceeds from the Rights Offering after payment of fees and
expenses would be approximately $8.5 million, assuming full exercise of all
Rights. The Rights Offering is, however, not conditioned upon any minimum
level of exercise of the Rights, and there can be no assurance that the
Company will raise any proceeds from the Rights Offering. C-TEC has, however,
informed the Company that it intends to exercise the Rights it receives for an
aggregate subscription price of $[ ] and that it intends to exercise
the Oversubscription Privilege to subscribe for all other Underlying Shares.
The opportunity to exercise the Oversubscription Privilege is available to all
holders of Rights on the same terms. See "The Rights Offering--Subscription
Privileges--Oversubscription Privilege." C-TEC does not intend to purchase
any additional Rights through open market purchases or otherwise.

The net proceeds, if any, from the Rights Offering will be used for
general corporate purposes. Specifically, the Company expects that any such
proceeds will be used (i) to repay up to $5 million of outstanding
indebtedness to Morgan Guaranty under the Morgan Demand Note, (ii) if
additional proceeds remain, to pay all or a portion of the payment of
$1,400,000 to be paid under the Lahey Settlement Agreement on or before July
1, 1995, (iii) if additional proceeds remain, to repay up to $887,000 of
outstanding indebtedness to C-TEC under the C-TEC Demand Note and (iv) if
additional proceeds remain, for other corporate purposes including capital
expenditures. The Morgan Demand Note has no stated maturity, is payable on
demand and has an interest rate equal to a base rate (higher of prime or
federal funds rate plus 1/2%) plus 1-3/4%. As of December 31, 1994, the
weighted average effective rate of interest on the Morgan Demand Note was
10.25%. The C-TEC Demand Note has no stated Maturity, is payable upon
demand and bears interest at a rate equal to the weighted average effective
rate charged under the Credit Agreement for the relevant period. See
"Recent Developments."

RECENT DEVELOPMENTS

CCV, a subsidiary of the Company, is party to a lawsuit commenced in
1988 in the Circuit Court for the County of Ottawa, Michigan, relating to
termination of Kenneth E. Lahey as president of CCV. Mr. Lahey asserted that
as a result of the termination he is entitled to an amount equal to the fair
market value of 10 percent of the outstanding shares of CCV stock (the "Lahey
Interest"). The trial court determined that Mr. Lahey was entitled to an
amount equal to the fair market value of the Lahey Interest and ordered, among
other things, that an appraisal proceeding be held to determine such fair
market value. The Company appealed such order, but the Michigan Court of
Appeals upheld the trial court's decision on December 27, 1993. On December
16, 1994, a panel of three appraisers ("Panel") rendered a decision in favor
of Mr. Lahey in the amount of $2.949 million. The Company requested the
Circuit Court for the City of Ottawa to remand this proceeding back to the
panel for further consideration of certain factors which were not included in
their decision on December 16, 1994. A hearing was held on January 16, 1995
before the Circuit Court for the City of Ottawa. The Court issued an Opinion
on February 14, 1995 denying the Company's motions and sustaining the decision
of the Panel in the amount of $2.949 million and awarded pre-judgment interest
in the amount of approximately $1.2 million. The Company filed a Motion for
Reconsideration with the Court. On March 27, 1995, the Court issued an Order
denying the Company's Motion for Reconsideration.

On April 18, 1995, Mr. Lahey and the Company entered into the Lahey
Settlement Agreement pursuant to which the Company has agreed to cause CCV
to make payments totaling $4.3 million in full satisfaction of all claims
Mr. Lahey may have had against the Company or its affiliates. The payment
schedule under the Lahey Settlement Agreement is as follows: (i) $100,000
upon signing of the Agreement, (ii) $1,400,000 on or before July 1, 1995
and (iii) $700,000 on or before July 1, 1996, 1997, 1998 and 1999. The
initial payment of $100,000 has been paid. C-TEC has agreed to ensure that
the payment of $1,400,000 due on or before July 1, 1995 is paid. The
Company had accrued approximtely $4.4 million as of December 31, 1994,
representing management's best estimate of the Company's potential
liability in respect of the matter.

The Company had total outstanding debt of $25,926,000 at December 31,
1994, consisting of $5,000,000 due under the Morgan Demand Note, at a weighted
average effective interest rate of 10.25%, and $20,926,000 due under the
Credit Agreement, at a weighted average effective interest rate of 6.65%.
Interest under the Credit Agreement is based on prime, Libor or CD rates
depending on the type of loan and terms of the agreement. Borrowings under
the Credit Agreement mature as follows: $887,000 on June 30, 1995, $4,032,000
on December 31, 1995, and $5,040,000 on December 31, 1996, 1997 and 1998. In
December 1992 and December 1993 Morgan Guaranty agreed to allow the Company to
restructure principal payments of $1,008,000 due in December 1992 and
$2,016,000 due in December 1993 into three installments due in December 1992,
March 1993 and June 1993 with respect to the December 1992 restructuring and
December 1993, March 1994 and June 1994 with respect to the December 1993
restructuring. These restructured payments have been paid in full. In
December 1994, the bank again agreed to allow the Company to restructure a
principal payment of $3,024,000 due in December 1994 into three installments
of $1,250,000 due and paid in December 1994 and $887,000 due in March and June
1995 respectively. The remaining scheduled principal payment amounts and due
dates were not affected. Based on the latest financial projections, the
Company will not be able to make the principal payments of long term debt as
scheduled for 1995. C-TEC loaned $887,000 to the Company on March 31, 1995 to
enable the Company to make the principal payment of $887,000 scheduled for
that date under the Credit Agreement. The loan from C-TEC is evidenced by the
C-TEC Demand Note. The C-TEC Demand Note has no stated Maturity, is payable
upon demand and bears interest at a rate equal to the weighted average
effective rate charged under the Credit Agreement for the relevant period.
The Company and Morgan Guaranty are working toward a mutually acceptable
restructuring of the debt and/or equity of the Company and are reviewing
available options, which include the sale of assets, the raising of equity and
the issuance of subordinated debt, among other things. There can be no
assurances that the Company will be able to successfully restructure its debt
and equity or that C-TEC would provide additional debt financing to the
Company.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock trades on the over-the-counter market. From May 1989
until February 1992 the principal market for the Common Stock was The Nasdaq
Stock Market ("Nasdaq"). However, the Common Stock's Nasdaq designation was
terminated on February 6, 1992 because the Company did not meet Nasdaq's
minimum capital and surplus requirements. Since then, the Common Stock has
been, and presently is, quoted on the OTC Bulletin Board (with such quotes
reported in the pink sheets of the National Quotations Bureau, Inc.) under the
symbol "MEEO." The following table indicates the high and low per-share bid
prices for the Common Stock as quoted on the OTC Bulletin Board since February
7, 1992, the first date quotes were available for the Common Stock on the OTC
Bulletin Board following termination of the Nasdaq designation. Prices listed
below represent inter-dealer quotations without adjustment for retail
mark-ups, mark-downs or commissions and may not necessarily represent actual
transactions. Trading of the Common Stock has been limited and sporadic and
thus does not constitute an established public trading market.

High Low

1992
First Quarter(1)........... $4.00 $3.50
Second Quarter............. 4.00 3.50
Third Quarter.............. 3.50 3.00
Fourth Quarter............. 3.00 2.50
1993
First Quarter.............. 3.50 2.75
Second Quarter............. 3.50 2.75
Third Quarter.............. 4.00 2.75
Fourth Quarter............. 4.125 3.125
1994
First Quarter.............. 4.00 3.75
Second Quarter............. 4.00 3.25
Third Quarter.............. 3.50 3.00
Fourth Quarter............. 3.75 3.00
1995
First Quarter.............. 3.75 3.75
Second Quarter(2).......... 3.75 3.75
____________________________

(1) From February 7, 1992.
(2) Through the close of business on April 18, 1995.

DILUTION

The Company currently has a negative net worth. The net tangible book
value of the shares of Common Stock as of December 31, 1994 was a deficiency
of approximately $(15.9) million, or $(6.63) per share. "Net tangible book
value" per share represents the amount of total tangible assets (total assets
less intangible assets) less total liabilities, divided by the number of
shares of Common Stock outstanding. After giving effect to the sale by the
Company of the [ ] shares of Common Stock offered hereby (assuming
full exercise of the Rights) and after deducting the estimated offering
expenses, the pro forma net tangible book value of the Company as of December
31, 1994 would have been approximately $[ ], or $[ ] per share,
representing an immediate and substantial dilution of $[ ] per share in
respect of shares of Common Stock purchased pursuant to this Rights Offering.
The following table illustrates this per share dilution:

Subscription Price...................................... $[ ]
Net tangible book value per share before offering... $(6.63)
Increase per share attributable to shareholders
exercising Rights................................ [ ]
Pro forma net tangible book value per share after offering [ ]
Dilution to shareholders exercising Rights(1)........... $ [ ]

(1) Dilution is determined by subtracting the net tangible book value per
share from the Subscription Price paid by an investor for a share of Common
Stock in the Rights Offering.

THE RIGHTS OFFERING

The Rights

The Company is distributing transferable Rights at no cost to the record
holders ("Holders") of outstanding shares of Common Stock as of ________ __,
1995 (the "Record Date"). The Company will distribute [ ] Rights for every
[ ] shares of Common Stock held on the Record Date. The Rights will be
evidenced by transferable subscription certificates (the "Subscription
Certificates") and each such Right entitles the holder thereof to subscribe
for one share of Common Stock.

The Subscription Price of $________ per share of Common Stock represents
a discount of __% from the closing bid price of $______ for the Common Stock
as quoted on the OTC Bulletin Board on ________ __, 1995, the day of the
commencement of the Rights Offering. There can be no assurance that the Common
Stock will trade at prices above the Subscription Price. See "Risk
Factors--Uncertain Market for Rights."

No fractional Rights or cash in lieu thereof will be issued or paid.
The number of Rights distributed to each Holder will be rounded up to the
nearest whole number. No Subscription Certificate may be divided in such a
way as to permit the holder of such certificate to receive a greater number of
Rights than the number to which such Subscription Certificate entitles its
holder, except that a depository, bank, trust company, or securities broker or
dealer holding shares of Common Stock on the Record Date for more than one
beneficial owner may, upon proper showing to the Subscription Agent, exchange
its Subscription Certificate to obtain a Subscription Certificate for the
number of Rights to which all such beneficial owners in the aggregate would
have been entitled had each been a Holder on the Record Date. The Company
reserves the right to refuse to issue any such Subscription Certificate if
such issuance would be inconsistent with the principle that each beneficial
owner's holdings will be rounded up to the nearest whole Right.

Because the number of Rights distributed to each record holder will be
rounded up to the nearest whole number, beneficial owners of Common Stock who
are also the record holders of such shares will receive more Rights under
certain circumstances than beneficial owners of Common Stock who are not the
record holders of their shares and who do not obtain (or cause the record
holder of their shares of Common Stock to obtain) a separate Subscription
Certificate with respect to the shares beneficially owned by them, including
shares held in an investment advisory or similar account. To the extent that
record holders of Common Stock or beneficial owners of Common Stock who obtain
a separate Subscription Certificate receive more Rights, they will be able to
subscribe for more shares pursuant to the Basic Subscription Privilege and,
in the event shares subscribed for pursuant to the Oversubscription Privilege
are prorated, such record holders or beneficial owners will be able to
subscribe for more shares pursuant to the Oversubscription Privilege.

The issuance by the Company of shares of Common Stock pursuant to the
Rights Offering is not conditioned upon the subscription of any minimum number
of shares of Common Stock by holders of the Rights, and no assurance can be
given that the Company will raise any proceeds from the Rights Offering.
C-TEC has, however, informed the Company that it intends to exercise the
Rights it receives for an aggregate subscription price of $[ ] and
that it intends to exercise the Oversubscription Privilege to subscribe for
all other Underlying Shares. The opportunity to exercise the Oversubscription
Privilege is available to all holders of Rights on the same terms. See "The
Rights Offering--Subscription Privileges--Oversubscription Privilege." C-TEC
does not intend to purchase any additional Rights through open market
purchases or otherwise.

BEFORE EXERCISING OR SELLING ANY RIGHTS, POTENTIAL INVESTORS ARE URGED
TO READ CAREFULLY THE INFORMATION SET FORTH UNDER "RISK FACTORS."

Expiration Date

The Rights will expire at 5:00 p.m., New York City time, on ________ __,
1995, unless extended (as it may be extended, the "Expiration Date"). After
such time, unexercised Rights will be null and void. The Company will not be
obligated to honor any purported exercise of Rights received by the
Subscription Agent after 5:00 p.m., New York City time, on the Expiration
Date, regardless of when the documents relating to such exercise were sent,
except pursuant to the Guaranteed Delivery Procedures described below.

Subscription Privileges

Basic Subscription Privilege. Each Right will entitle the Holder
thereof to receive, upon payment of the Subscription Price, one share of
Common Stock (the "Basic Subscription Privilege"). Certificates representing
shares of Common Stock purchased pursuant to the Basic Subscription Privilege
will be delivered to subscribers as soon as practicable after the
corresponding Rights have been validly exercised and full payment for shares
has been received and cleared.

Oversubscription Privilege. Subject to the allocation described below,
each Right also carries the right to subscribe at the Subscription Price for
additional shares of Common Stock (the "Oversubscription Privilege") up to the
amount offered hereby. All beneficial holders who exercise the Basic
Subscription Privilege in full will be entitled to exercise the
Oversubscription Privilege.

Underlying Shares will be available for purchase pursuant to the
Oversubscription Privilege only to the extent that any Underlying Shares are
not subscribed for through the Basic Subscription Privilege. If the
Underlying Shares not subscribed for through the Basic Subscription Privilege
(the "Excess Shares") are not sufficient to satisfy all subscriptions pursuant
to the Oversubscription Privilege, the Excess Shares will be allocated pro
rata (subject to the elimination of fractional shares) among those holders of
Rights exercising the Oversubscription Privilege, in proportion, not to the
number of shares requested pursuant to the Oversubscription Privilege, but to
the number of shares each beneficial holder exercising the Oversubscription
Privilege has purchased pursuant to the Basic Subscription Privilege;
provided, however, that if such pro rata allocation results in any Rights
holder being allocated a greater number of Excess Shares than such holder
subscribed for pursuant to the exercise of such holder's Oversubscription
Privilege, then such holder will be allocated only such number of Excess
Shares as such holder subscribed for and the remaining Excess Shares will be
allocated among all other holders exercising the Oversubscription Privilege.
Certificates representing shares of Common Stock purchased pursuant to the
Oversubscription Privilege will be delivered to subscribers as soon as
practicable after the Expiration Date and after all prorations and adjustments
contemplated by the terms of the Rights Offering have been effected.

Banks, brokers and other nominee holders of Rights who exercise the
Basic Subscription Privilege and the Oversubscription Privilege on behalf of
beneficial owners of Rights will be required to certify to the Subscription
Agent and the Company, in connection with the exercise of the Oversubscription
Privilege, as to the aggregate number of Rights that have been exercised and
the number of Underlying Shares that are being subscribed for pursuant to the
Oversubscription Privilege by each beneficial owner of Rights on whose behalf
such nominee holder is acting.

Exercise of Rights

Rights may be exercised by delivering to The First National Bank of
Boston (the "Subscription Agent"), at or prior to 5:00 p.m., New York City
time, on the Expiration Date, the properly completed and executed Subscription
Certificate evidencing such Rights with any signatures required to be
guaranteed so guaranteed, together with payment in full of the Subscription
Price for each Underlying Share subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege. Any Rights holder
subscribing for an aggregate of more than 25,000 Underlying Shares pursuant to
the Oversubscription Privilege prior to the Expiration Date shall not be
required to deliver payment for such number of Underlying Shares in excess of
25,000 until the Expiration Date. The Company, in its sole discretion, may
determine to waive payment for such excess number of Underlying Shares until
after the Expiration Date and after all prorations and adjustments
contemplated by the terms of the Rights Offering have been effected. All
payments must be by (a) check or bank draft drawn upon a U.S. bank or postal
or express money order payable to The First National Bank of Boston, as
Subscription Agent, or (b) by wire transfer of same-day funds, in which case
please contact the Subscription Agent at (617) 575-2700 for such information.
Payments will be deemed to have been received by the Subscription Agent only
upon (i) clearance of any uncertified check, (ii) receipt by the Subscription
Agent of any certified check or bank draft upon a U.S. bank or of any postal
or express money order or (iii) receipt of good funds in the Subscription
Agent's account designated above. If paying by uncertified personal check,
please note that the funds paid thereby may take at least five business days
to clear. Accordingly, holders of Rights who wish to pay the Subscription
Price by means of uncertified personal check are urged to make payment
sufficiently in advance of the Expiration Date to ensure that such payment is
received and clears by such date and are urged to consider payment by means of
certified or cashier's check, money order or wire transfer of funds.

The address to which the Subscription Certificates and payment of the
Subscription Price should be delivered is:

By Mail:

The First National Bank of Boston
P.O. Box 1872
Mail Stop 45-01-19
Boston, Massachusetts
02105-1872

By Hand:

BancBoston Trust Company of
New York
55 Broadway
3rd Floor
New York, New York
10006

By Overnight Courier:

The First National Bank of Boston
Shareholder Services Division
150 Royall Street
Mail Stop 45-01-19
Canton, Massachusetts
02021

If a Rights holder wishes to exercise Rights, but time will not permit such
holder to cause the Subscription Certificate or Subscription Certificates
evidencing such Rights to reach the Subscription Agent on or prior to the
Expiration Date, such Rights may nevertheless be exercised if all of the
following conditions (the "Guaranteed Delivery Procedures") are met:

(i) such holder has caused payment in full of the Subscription Price
for each Underlying Share being subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege (subject to
the right of the Company to waive advance payment in respect of the
Oversubscription Privilege as described above) to be received (in the
manner set forth above) by the Subscription Agent on or prior to the
Expiration Date;

(ii) the Subscription Agent receives, on or prior to the Expiration
Date, a guarantee notice ("Notice of Guaranteed Delivery"),
substantially in the form provided with the instructions as to use of
Mercom, Inc. Subscription Certificates (the "instructions") distributed
with the Subscription Certificates, from a member firm of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc. ("NASD"), or from a commercial bank or trust
company having an office or correspondent in the United States or from a
bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program,
pursuant to Rule 17Ad-15 of the Exchange Act (each, an "Eligible
Institution"), stating the name of the exercising Rights holder, the
number of Rights represented by the Subscription Certificate or
Subscription Certificates held by such exercising Rights holder, the
number of Underlying Shares being subscribed for pursuant to the Basic
Subscription Privilege and the number of Underlying Shares, if any,
being subscribed for pursuant to the Oversubscription Privilege, and
guaranteeing the delivery to the Subscription Agent of any Subscription
Certificate evidencing such Rights within five business days following
the Expiration Date; and

(iii) the properly completed Subscription Certificate evidencing the
Rights being exercised, with any signatures required to be guaranteed so
guaranteed, is received by the Subscription Agent within five business
days following the Expiration Date. The Notice of Guaranteed Delivery
may be delivered to the Subscription Agent in the same manner as
Subscription Certificates at the address set forth above, or may be
transmitted to the Subscription Agent by facsimile transmission
(telecopy no. (617) 575-2232 or -2233). Additional copies of the form
of Notice of Guaranteed Delivery are available upon request from the
Information Agent, whose address and telephone number are set forth
under "Information Agent."

Funds received in payment of the Subscription Price for Excess Shares
subscribed for pursuant to the Oversubscription Privilege will be held in a
segregated account pending issuance of such Excess Shares. If a Rights holder
exercising the Oversubscription Privilege is allocated less than all of the
shares of Common Stock which such holder subscribed for pursuant to the
Oversubscription Privilege, the excess funds paid by such holder in respect of
the Subscription Price for shares not issued shall be returned by mail without
interest or deduction as soon as practicable after the Expiration Date and
after all prorations and adjustments contemplated by the terms of the Rights
Offering have been effected.

Unless a Subscription Certificate (i) provides that the shares of Common
Stock to be issued pursuant to the exercise of Rights represented thereby are
to be delivered to the record holder of such Rights or (ii) is submitted for
the account of an Eligible Institution, signatures on such Subscription
Certificate must be guaranteed by an Eligible Institution or other eligible
guarantor institution which is a member of or a participant in a medallion
guarantee program acceptable to the Subscription Agent.

Holders who hold shares of Common Stock for the account of others, such
as brokers, trustees or depositories for securities, should notify the
respective beneficial owners of such shares as soon as possible to ascertain
such beneficial owners' intentions and to obtain instructions with respect to
the Rights. If the beneficial owner so instructs, the record holder of such
Rights should complete Subscription Certificates and submit them to the
Subscription Agent with the proper payment. In addition, beneficial owners of
Common Stock or Rights held through a record holder should contact the holder
and request the holder to effect transactions in accordance with such
beneficial owner's instructions.

The instructions accompanying the Subscription Certificates should be
read carefully and followed in detail. DO NOT SEND SUBSCRIPTION CERTIFICATES
TO THE COMPANY.

THE METHOD OF DELIVERY OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE
SUBSCRIPTION PRICE TO THE SUBSCRIPTION AGENT WILL BE AT THE ELECTION AND RISK
OF THE RIGHTS HOLDERS, BUT IF SENT BY MAIL IT IS RECOMMENDED THAT SUCH
CERTIFICATES AND PAYMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO
ENSURE DELIVERY TO THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. BECAUSE UNCERTIFIED
PERSONAL CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, YOU ARE
STRONGLY URGED TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR
CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.

All questions concerning the timeliness, validity, form and eligibility
of any exercise of Rights will be determined by the Company, whose
determinations will be final and binding. The Company in its sole discretion
may waive any defect or irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine, or reject the purported
exercise of any Right. Subscriptions will not be deemed to have been received
or accepted until all irregularities have been waived or cured within such
time as the Company determines in its sole discretion. Neither the Company,
the Subscription Agent, nor the Information Agent will be under any duty to
give notification of any defect or irregularity in connection with the
submission of Subscription Certificates or incur any liability for failure to
give such notification.

Any questions or requests for assistance concerning the method of
exercising Rights or requests for additional copies of this Prospectus, the
Instructions or the Notice of Guaranteed Delivery should be directed to the
Information Agent, MacKenzie Partners, Inc., at its address set forth under
"Information Agent" (telephone: (212) 929-5500 or (800) 322-2885).

No Revocation

ONCE A HOLDER OF RIGHTS HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE
AND/OR THE OVERSUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED.

Method of Transferring Rights

Rights may be purchased or sold through usual investment channels,
including banks and brokers. It is anticipated that the Rights will be traded
on the over-the-counter market under the symbol "MEEOR." Rights also may be
sold in private sales transactions. No assurance can be given, however, that
a market for the Rights will develop or, if such a market develops, as to how
long it will continue.

The Rights evidenced by a single Subscription Certificate may be
transferred in whole by endorsing the Subscription Certificate for transfer in
accordance with the instructions accompanying the Subscription Certificate. A
portion of the Rights evidenced by a single Subscription Certificate (but not
fractional Rights) may be transferred by delivering to the Subscription Agent
a Subscription Certificate properly endorsed for transfer, with instructions
to register such portion of the Rights evidenced thereby in the name of the
transferee (and to issue a new Subscription Certificate to the transferee
evidencing such transferred Rights). In such event, a new Subscription
Certificate evidencing the balance of the Rights will be issued to the Rights
holder or, if the Rights holder so instructs, to an additional transferee.

Holders wishing to transfer all or a portion of their Rights (but not
fractional Rights) should allow a sufficient amount of time prior to the
Expiration Date for (i) the transfer instructions to be received and processed
by the Subscription Agent, (ii) a new Subscription Certificate to be issued
and transmitted to the transferee or transferees with respect to transferred
Rights, and to the transferor with respect to retained Rights, if any, and
(iii) the Rights evidenced by such new Subscription Certificates to be
exercised or sold by the recipients thereof. Neither the Company nor the
Subscription Agent shall have any liability to a transferee or transferor of
Rights if Subscription Certificates are not received in time for exercise or
sale prior to the Expiration Date.

Except for the fees charged by the Subscription Agent (which will be
paid by the Company), all commissions, fees and other expenses (including
brokerage commissions and transfer taxes) incurred in connection with the
purchase, sale or exercise of Rights will be for the account of the transferor
of the Rights, and none of such commissions, fees or expenses will be paid by
the Company or the Subscription Agent.

Procedures for Book Entry Transfer Facility Participants

The Company anticipates that the Rights will be eligible for transfer
through, and that the exercise of the Basic Subscription Privilege (but not
the Oversubscription Privilege) may be effected through, the facilities of the
Depository Trust Company, Midwest Securities Trust Company and Philadelphia
Depository Trust Company (collectively, the "Book Entry Facilities"; Rights
exercised through any such facility are referred to as "Book Entry Exercised
Rights"). The holder of a Book Entry Exercised Right may exercise the
Oversubscription Privilege in respect of such Book Entry Exercised Right by
properly executing and delivering to the Subscription Agent, at or prior to
5:00 p.m., New York City time, on the Expiration Date, a Nominee Holder
Oversubscription Form, together with payment of the Subscription Price for the
number of Underlying Shares for which the Oversubscription Privilege is to be
exercised. Any Rights holder subscribing for an aggregate of more than 25,000
Underlying Shares pursuant to the Oversubscription Privilege prior to the
Expiration Date shall not be required to deliver payment for such number of
Underlying Shares in excess of 25,000 until the Expiration Date. The Company,
in its sole discretion, may determine to waive payment for such excess number
of Underlying Shares until after the Expiration Date and after all prorations
and adjustments contemplated by the terms of the Rights Offering have been
effected. Copies of the Nominee Holder Oversubscription Form may be obtained
from the Subscription Agent.

Determination of Subscription Price

The Subscription Price was determined by the Company and its Board of
Directors. In making this determination, the Company considered, among other
factors, the market price of the Common Stock, the pro rata nature of the
offering and pricing discounts customarily applied in transactions of this
type. The Subscription Price should not be considered an indication of the
actual value of the Company or the Common Stock. See "Price Range of Common
Stock and Dividend Policy."

Intent of C-TEC

C-TEC will receive [ ] Rights in respect of the shares of Common
Stock it owns, and such Rights represent 43.63% of the total Rights to be
distributed. C-TEC has informed the Company that it intends to exercise the
Rights it receives for an aggregate subscription price of $[ ] and that
it intends to exercise the Oversubscription Privilege to subscribe for all
other Underlying Shares. The opportunity to exercise the Oversubscription
Privilege is available to all holders of Rights on the same terms. See "The
Rights Offering--Subscription Privileges--Oversubscription Privilege." C-TEC
does not intend to purchase any additional Rights through open market
purchases or otherwise. If (i) in accordance with its stated intent, C-TEC
exercises its Rights and oversubscribes for all other Underlying Shares and
(ii) no other Holders exercise their Rights, C-TEC will own approximately [ ]%
of the Common Stock after the Rights Offering.

Foreign and Certain Other Shareholders

Subscription Certificates will not be mailed to Holders whose addresses
are outside the United States or who have an APO or FPO address, but will be
held by the Subscription Agent for their account. To exercise such Rights,
such a Holder must notify the Subscription Agent on or prior to 11:00 a.m.,
New York City time, on ________ __, 1995, and must establish to the
satisfaction of the Subscription Agent that such exercise is permitted under
applicable law. If such a Holder does not notify the Subscription Agent and
provide acceptable instructions to the Subscription Agent by such time, such
Rights represented thereby will be sold, if feasible, and the net proceeds, if
any, remitted to such Holder. If the Rights can be sold, sales of such Rights
will be deemed to have been effected at the weighted average price received by
the Subscription Agent on the day such Rights are sold, less any applicable
brokerage commissions, taxes and other expenses.

Other Matters

The Rights Offering is not being made in any state or other jurisdiction
in which it is unlawful to do so, nor is the Company selling or accepting any
offers to purchase any shares of Common Stock from Rights holders who are
residents of any such state or other jurisdiction. The Company may delay the
commencement of the Rights Offering in certain states or other jurisdictions
in order to comply with the securities law requirements of such states or
other jurisdictions. It is not anticipated that there will be any changes in
the terms of the Rights Offering. The Company, if it so determines in its
sole discretion, may decline to make modifications to the terms of the Rights
Offering requested by certain states or other jurisdictions, in which event
Rights holders resident in those states or jurisdictions will not be eligible
to participate in the Rights Offering.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary describes certain United States federal income tax
considerations applicable to U.S. Holders who hold Common Stock as a capital
asset and who receive Rights in respect of such Common Stock in the initial
issuance of the Rights (the "Issuance"). This summary is based upon laws,
regulations, rulings and decisions currently in effect. This summary does not
discuss all aspects of federal income taxation that may be relevant to a
particular investor or to certain types of investors subject to special
treatment under the federal income tax laws (for example, banks, dealers in
securities, life insurance companies, tax exempt organizations and foreign
taxpayers), nor does it discuss any aspect of state, local or foreign tax laws.

Issuance of the Rights

Holders of Common Stock will not recognize taxable income in connection
with the receipt or exercise of the Rights.

Basis and Holding Period of the Rights

Except as provided in the following sentence, the basis of the Rights
received by a shareholder as a distribution with respect to such shareholder's
Common Stock will be zero. If either (i) the fair market value of the Rights
on the date of Issuance is 15% or more of the fair market value (on the date
of Issuance) of the Common Stock with respect to which they are received or
(ii) the shareholder elects, in his or her federal income tax return for the
taxable year in which the Rights are received, to allocate part of the basis
of such Common Stock to the Rights, then upon exercise or transfer of the
Rights, the shareholder's basis in such Common Stock will be allocated between
the Common Stock and the Rights in proportion to the fair market values of
each on the date of Issuance. The holding period of a shareholder with
respect to the Rights received as a distribution on such shareholder's Common
Stock will include the shareholder's holding period for the Common Stock with
respect to which the Rights were issued.

Transfer of the Rights

A shareholder who sells Rights received in the Issuance prior to
exercise will recognize gain or loss equal to the difference between the sale
proceeds and such shareholder's basis (if any) in the Rights sold. Such gain
or loss will be long-term capital gain or loss if such shareholder's holding
period in the Rights (as discussed above) exceeds one year. The excess of net
long-term capital gains over net short-term capital losses is taxed at a
lower rate than ordinary income for certain non-corporate taxpayers. The
distinction between capital gain or loss and ordinary income is also
relevant for purposes of, among other things, limitations on the
deductibility of capital losses.

Lapse of the Rights

Shareholders who allow the Rights received by them at the Issuance to
lapse will not recognize any gain or loss, and no adjustment will be made to
the basis of the Common Stock, if any, owned by such holders of the Rights.

Exercise of the Rights; Basis
and Holding Period of Common Stock

Holders of Rights will not recognize any gain or loss upon the exercise
of such Rights. The basis of the Common Stock acquired through exercise of
the Rights will be equal to the sum of the Subscription Price therefor and the
Rights holder's basis in such Rights (if any) as described above. The holding
period for the Common Stock acquired through exercise of the Rights will begin
on the date the Rights are exercised.

THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY.
ACCORDINGLY, EACH SHAREHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE RIGHTS OFFERING ON HIS OR
HER OWN PARTICULAR TAX SITUATION, INCLUDING THE APPLICATION AND EFFECT OF
STATE AND LOCAL INCOME AND OTHER TAX LAWS.

DESCRIPTION OF CAPITAL STOCK

The following general summary of the Common Stock is qualified in its
entirety by reference to the Company's Certificate of Incorporation (the
"Certificate of Incorporation"), a copy of which is on file with the
Commission. See "Available Information."

The authorized capital stock of the Company is 5,150,000 shares,
consisting of 5,000,000 shares of Common Stock, par value $1.00 per share, and
150,000 shares of Preferred Stock, par value $100 per share ("Preferred
Stock"). As of March 31, 1995, the Company had outstanding 2,393,530 shares
of Common Stock and no shares of Preferred Stock.

With respect to all matters upon which shareholders are entitled to vote
(including the election of directors), every holder of Common Stock is
entitled to cast one vote for each share of the Common Stock held. Holders of
Common Stock are not permitted to cumulate their votes for the election of
directors. The Certificate of Incorporation does not provide for preemptive
rights for the Common Stock.

The Certificate of Incorporation authorizes the Company Board of
Directors, to the full extent permitted by law, to issue shares of Preferred
Stock and to fix by resolution such voting rights, designations, powers,
preferences, privileges, limitations, options, conversion rights or other
special rights, as it deems fit.

The transfer agent and registrar for the Common Stock is The First
National Bank of Boston.

Approximately [ ] shares of Common Stock will be issued in
connection with the Rights Offering assuming exercise of all Rights. Based on
the 2,393,530 shares of Common Stock outstanding as of March 31, 1995, the
issuance of such shares pursuant to the Rights Offering would result (on a pro
forma basis as of such date) in a [ ]% increase in the amount of
outstanding Common Shares.

The outstanding shares of the Common Stock trade on the over-the-counter
market under the symbol "MEEO."

SUBSCRIPTION AGENT

The Company has appointed The First National Bank of Boston as
Subscription Agent for the Rights Offering. The Subscription Agent's address,
which is the address to which the Subscription Certificates and payment of the
Subscription Price (other than wire transfers) should be delivered, as well as
the address to which any Notice of Guaranteed Delivery must be delivered, is:

By Mail:

The First National Bank of Boston
P.O. Box 1872
Mail Stop 45-01-19
Boston, Massachusetts
02105-1872

By Hand:

BancBoston Trust Company of
New York
55 Broadway
3rd Floor
New York, New York
10006

By Overnight Courier:

The First National Bank of Boston
Shareholder Services Division
150 Royall Street
Mail Stop 45-01-19
Canton, Massachusetts
02021

The Company will pay the fees and expenses of the Subscription Agent, and has
also agreed to indemnify the Subscription Agent from certain liabilities in
connection with the Rights Offering.

INFORMATION AGENT

The Company has appointed MacKenzie Partners, Inc. as Information Agent
for the Rights Offering. Any questions or requests for additional copies of
this Prospectus, the Instructions or the Notice of Guaranteed Delivery may be
directed to the Information Agent at the telephone number and address below.

MacKenzie Partners, Inc.
156 Fifth Avenue
9th Floor
New York, New York
10010
or
Call Toll Free
(800) 322-2885

The Company will pay the fees and expenses of the Information Agent and has
also agreed to indemnify the Information Agent from certain liabilities in
connection with the Rights Offering.

LEGAL MATTERS

The validity of the authorization and issuance of the securities
offered hereby is being passed upon by Raymond B. Ostroski, Executive Vice
President and General Counsel of the Company. Davis Polk & Wardwell, New
York, New York, will advise the Company with respect to certain other
matters relating to the Rights Offering.

EXPERTS

The Company's consolidated balance sheets as of December 31, 1994 and
1993 and the consolidated statements of operations, shareholders' capital
deficiency and cash flows for each of the three years in the period ended
December 31, 1994, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the report, which includes an explanatory
paragraph expressing substantial doubt about the Company's ability to continue
as a going concern and an explanatory paragraph referring to the Company's
change in method of accounting for income taxes, of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.

No dealer, salesperson or any other person has
been authorized to give any information or to
make any representations other than those
contained or incorporated by reference in this
Prospectus in connection with the offer made by
this Prospectus, and, if given or made, such
information or representation must not be relied [LOGO]
upon as having been sanctioned or authorized by
the Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall
under any circumstances create any implication
that there has been no change in the affairs of the
Company since the date hereof. This Prospectus
does not constitute an offer or solicitation by [ ] Shares
anyone in any jurisdiction in which the person
making such offer or solicitation is not qualified to Common Stock
do so or to any person to whom it is unlawful to
make such offer or solicitation.

TABLE OF CONTENTS

Page
Available Information.................
Documents Incorporated by Reference... PROSPECTUS
Prospectus Summary....................
Risk Factors..........................
Use of Proceeds.......................
Recent Developments...................
Price Range of Common Stock and
Dividend Policy...................
Dilution..............................
The Rights Offering...................
Certain Federal Income Tax
Consequences......................
Description of Capital Stock..........
Subscription Agent.................... Dated ________ __, 1995
Information Agent.....................
Legal Matters.........................
Experts...............................

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table sets forth expenses in connection with the
issuance and distribution of the securities being registered. All amounts
shown are estimated, except the SEC registration fee and the NASD review fee.

SEC registration fee................................. $3,302

NASD review fee...................................... $1,458

Financial Advisor's fees and expenses................ $ *

Subscription Agent's fees and expenses............... $ *

Information Agent's fees and expenses................ $ *

Accounting fees...................................... $ *

Legal fees and expenses (including Blue Sky fees and expenses) $ *

Printing and engraving fees.......................... $ *

Miscellaneous........................................ $ *

Total.......................................... $ *

________________________________
(*) To be supplied by amendment.

Item 15. Indemnification of Directors and Officers

Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") grants each corporation organized thereunder the power to
indemnify its directors and officers against liabilities for certain of their
acts. Article 8 of the Company's Certificate of Incorporation provides for
indemnification of directors, except for liability (i) for breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for
intentional misconduct or knowing violation of law, (iii) under DGCL Section
174 or (iv) for any transaction from which the director derived an improper
personal benefit. Article VIII of the Company By-Laws provides that, except
as prohibited by law, any director, officer, employee or agent of the Company
is entitled to be indemnified in any action or proceeding in which he or she
may be involved by virtue of holding such position to the fullest extent
permissible under DGCL Section 145.

In addition, the Company maintains a directors' and officers'
liability insurance policy.

For the undertaking with respect to indemnification, see Item 17
herein.

Item 16. Exhibits

5 - Opinion of Raymond B. Ostroski*

23(a) - Consent of Coopers & Lybrand L.L.P.

23(b) - Consent of Raymond B. Ostroski (included in Exhibit 5)*

24(a) - Power of attorney (included in the signature page to the
Registration Statement)

99(a) - Form of Subscription Certificate

99(b) - Form of Instructions for Subscription Certificates

99(c) - Form of Notice of Guaranteed Delivery

99(d) - Form of Subscription Agency Agreement*

99(e) - Form of Nominee Holder Oversubscription Exercise Form

99(f) - Form of Nominee Holder Certification

99(g) - Important Tax Information

___________________
* To be supplied by amendment.

Item 17. Undertakings

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions referred to
in Item 15 of this registration statement, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered hereby, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant hereby certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Princeton, State of New Jersey, on
the 19th day of April, 1995.

MERCOM, INC.

By /s/ David C. McCourt
----------------------
David C. McCourt
Chairman and Chief
Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David C. McCourt, Michael J. Mahoney and
Raymond B. Ostroski, and each of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and revocation, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement and to file the same with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacity and on the dates indicated.

Signature Title Date

Director, Chairman and
/s/ David C. McCourt Chief Executive Officer April 19, 1995
- -------------------------
David C. McCourt

Director, President and
/s/ Michael J. Mahoney Chief Operating Officer April 19, 1995
- -------------------------
Michael J. Mahoney

Director, Executive Vice
/s/ Bruce C Godfrey President, Chief Financial
- ------------------------- Officer and Principal
Bruce C. Godfrey Accounting Officer April 19, 1995

/s/ Raymond B. Ostroski Director, Executive Vice
- ------------------------- President and General
Raymond B. Ostroski Counsel April 19, 1995

/s/ Clifford L. Jones Director April 19, 1995
- -------------------------
Clifford L. Jones

/s/ Harold J. Rose, Jr. Director April 19, 1995
- -------------------------
Harold J. Rose, Jr.

/s/ George C. Stephenson Director April 19, 1995
- -------------------------
George C. Stephenson

EXHIBIT INDEX

Exhibit
Number Description of Document

5 Opinion of Raymond B. Ostroski*

23(a) Consent of Coopers & Lybrand L.L.P.

23(b) Consent of Raymond B. Ostroski (included in Exhibit 5)*

24(a) Power of attorney (included in the signature page to the
Registration Statement)

99(a) Form of Subscription Certificate

99(b) Form of Instructions for Subscription Certificates

99(c) Form of Notice of Guaranteed Delivery

99(d) Form of Subscription Agency Agreement*

99(e) Form of Nominee Holder Oversubscription Exercise Form

99(f) Form of Nominee Holder Certification

99(g) Important Tax Information

____________________________
* To be supplied by amendment.