C TEC CORP, S-3, 1994-07-01

C TEC CORP
S-3, 1994-07-01
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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As filed with the Securities and Exchange Commission on July 1, 1994
Registration No. 33-_____
==============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------

C-TEC CORPORATION
(Exact name of Registrant as specified in its charter)

Pennsylvania 23-2093008
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

46 Public Square
P.O. Box 3000
Wilkes-Barre, Pennsylvania 18703-3000
(717) 825-1100
(Address, including zip code, and telephone number,
including area code of Registrant's principal executive offices)

----------------

Raymond B. Ostroski
Vice President and General Counsel
C-TEC Corporation
46 Public Square
P.O. Box 3000
Wilkes-Barre, Pennsylvania 18703-3000
(717) 825-1100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

----------------

Copy to:
Peter R. Douglas
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000

----------------

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
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Share Offering Price Registration Fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$1.00 per share ........ 16,509,593 $20.20(1) $333,439,779 $114,998
- -----------------------------------------------------------------------------------------------
Rights..................... 16,509,593 N/A N/A N/A(2)
===============================================================================================
<FN>
(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 80% of the high and low price of $25.25 for such
shares on The NASDAQ Stock Market's National Market on June 27, 1994.

(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.
</TABLE>
----------------

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 July 1, 1994

[ ] Shares
C-TEC Corporation
Common Stock

C-TEC Corporation, a Pennsylvania corporation (the "Company"), is
distributing to holders of record of shares of its Common Stock, par value
$1.00 per share (the "Common Stock"), and to holders of record of shares of
its Class B Common Stock, par value $1.00 per share (the "Class B Stock",
and collectively with the Common Stock, the "Company 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
Company Stock held by them as of the close of business on [ ], 1994 [the
effective date of the Registration Statement of which this Prospectus forms
a part] (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 Company
Stock will be rounded up to the nearest whole number. Rights holders may
purchase one share of Common Stock for each whole Right held. Each Right
also carries the right to subscribe (the "Oversubscription Privilege") at
the Subscription Price for 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.

The Rights will expire at 5:00 p.m., New York City time, on [ ], 1994
[21 calendar days after the Record Date] (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 "Investment Considerations--
Dilution."

As of June 30, 1994, RCN Corporation, a Delaware corporation ("RCN"),
owns directly or indirectly, 600,768 shares of Common Stock, representing
7.5% of the outstanding Common Stock, and 5,094,223 shares of Class B
Stock, representing 59.6% of the outstanding Class B Stock. RCN will
receive [ ] Rights in respect of the shares of Company Stock it owns, and
such Rights represent 34.5% of the total Rights to be distributed. RCN has
informed the Company that it intends to exercise the Rights it receives for
an aggregate subscription price of $[ ]. The Common Stock has less voting
power per share than the Class B Stock. See "Description of Capital
Stock--Voting Rights and Powers." As a result of its ownership of 59.6% of
the Class B Stock and 7.5% of the Common Stock, RCN has, and after the
Rights Offering will have, effective control of the Company.

The principal market for the Common Stock is The NASDAQ Stock Market's
National Market ("NASDAQ"). It is anticipated that the Rights will trade
on NASDAQ under the symbol "CTEXR." One registered broker-dealer has
indicated to the Company that it intends to make a market in the Rights.
There can be no assurance, however, that a market for the Rights will
develop. Rights may also be sold in over-the-counter and private sales
transactions. Orders to sell Rights must be received by the
Subscription/Information Agent (as hereinafter defined) not later than
11:00 a.m. on [ ], 1994, if a holder wishes to sell Rights through the
Subscription/Information Agent. On June 30, 1994, the last day on which
trade prices were reported prior to the public announcement of the Rights
Offering, the closing sale price of the Common Stock on NASDAQ was $25.25
per share. On [ ], 1994, the closing sale price of the Common Stock on
NASDAQ was $[ ] per share.

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.

----------------

BEFORE MAKING AN INVESTMENT DECISION, POTENTIAL INVESTORS SHOULD CARE-
FULLY CONSIDER THE FACTORS SET FORTH IN "INVESTMENT CONSIDERATIONS"
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS.

=============================================================================
Underwriting Discounts Proceeds to the
Price to Public and Commissions (1) Company(2)
- -----------------------------------------------------------------------------
Per Share......... $ N/A $
- -----------------------------------------------------------------------------
Total............. $ N/A $
=============================================================================
(1) See "Plan of Distribution" for information with respect to contingent
fees payable by the Company.

(2) Before deduction of estimated expenses of $[ ] payable by the Company,
including registration fees, listing fees, financial advisory, legal and
accounting fees, soliciting dealer fees, printing expenses and other
miscellaneous fees and expenses.

------------------------

The date of this Prospectus is [ ], 1994.

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's Common Stock is quoted on NASDAQ and such
reports, proxy statements and other information can also be inspected at
the offices of NASDAQ Operations, 1735 K Street, N.W., Washington, D.C.
20006.

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. 0-11053) 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, 1993, (ii) the Company's Proxy Statement
dated March 15, 1994, and (iii) the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1994.

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 Subscription/Information Agent at
(212) [ ], or, if made in writing, to [Name, address], attention: [ ].
Such requests may also be directed to Raymond B. Ostroski, Vice President
and General Counsel at (717) 825-1186 or, if made in writing, to C-TEC
Corporation, 46 Public Square, P.O. Box 3000, Wilkes-Barre, Pennsylvania
18703-3000, attention: Raymond B. Ostroski, Vice President and General
Counsel.

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 was organized in 1979 and is incorporated under the laws
of the Commonwealth of Pennsylvania. The Company is a holding company with
wholly owned subsidiaries which are engaged in various aspects of the
telecommunications industry and which are organized into five principal
groups - Telephone, Cable, Communications Services, Mobile Services, and
Long Distance. Through its wholly owned subsidiaries, the Company also has
ownership interests in a number of other entities providing
telecommunications services.

The Telephone Group consists of a Pennsylvania public utility
providing local telephone service to a 19 county, 5,067 square mile service
territory in Pennsylvania. As of May 31, 1994, the Telephone Group
serviced approximately 214,000 main access lines. Of these 168,000 were
residential and 46,000 were primarily related to business. This Group's
operating territory is rural, containing only 38.8 access lines per square
mile as compared to a Pennsylvania average of 151.0 lines per square mile.
The Group's 79 central offices serve an average of 2,500 lines and 65
square miles.

The Cable Group is a cable television operator with cable television
systems located in the States of New York, New Jersey, Michigan and
Delaware. The Group owns and operates cable television systems serving
230,000 customers and manages cable television systems with an additional
36,000 customers, ranking it among the top 35 multiple system operators in
the United States.

The Communications Services Group presently carries out business
principally in the Northeastern United States providing telecommunications
related engineering and technical services. These services are provided
out of the Group headquarters in Wilkes-Barre, Pennsylvania, and regional
offices in Pennsylvania, New York City and Virginia.

The Mobile Services Group currently operates cellular telephone
systems in metropolitan statistical areas ("MSAs") and rural statistical
areas ("RSAs") throughout eight counties in Northeastern and Central
Pennsylvania and 24 counties in Southeast Iowa, serving a total population
of 1.5 million. The Group also operates paging and message management
services in Northeastern Pennsylvania. On April 1, 1994, the Company
signed a definitive agreement for the sale of its cellular properties to
Independent Cellular Network, Inc. ("ICN") for approximately $182.5
million. The sale is subject to Federal Communications Commission ("FCC"),
antitrust and other approvals. For information on the pro forma effect of
such agreed sale, see "Pro Forma Condensed Consolidated Financial
Statements."

The Long Distance Group currently operates in Pennsylvania. The Group
began operations in 1990 by servicing the local service area of the
Telephone Group. In late 1992, the Long Distance Group entered the Wilkes-
Barre/Scranton territory served by Bell Atlantic. In late 1993, the Group
established sales offices in additional markets in Philadelphia,
Pittsburgh, Harrisburg and Allentown. The primary focus in these markets
is providing service to residential and business customers.

The Company believes that the long term competitiveness of
telecommunications systems will be based upon the capacity to provide
voice, video and data services over a single network (a "Full Service
Network"). Although the development of these Full Service Networks is
still in the formative stage, the key components of these networks can be
found in various segments of the existing telecommunications industry. The
Company believes that it is well positioned to implement competitive Full
Service Networks designed around traditional cable television and telephone
systems as well as other platforms. The Company intends to expand and
develop certain of its existing cable television and telephone systems into
Full Service Networks, expand the footprint available for upgrade through
acquisitions, joint ventures and similar strategic investments and
implement these expanded services at an early stage relative to its
competitors.

The Company's principal executive offices are located at 46 Public
Square, P.O. Box 3000, Wilkes-Barre, Pennsylvania 18703-3000 (telephone:
(717) 825-1100).

THE RIGHTS OFFERING

Rights Each Holder of Company Stock will receive [ ] transferable
Rights for every [ ] shares of Company Stock held of
record on [ ], 1994 [the effective date of the
Registration Statement of which this Prospectus forms a
part] (the "Record Date"). The number of Rights
distributed by the Company to each Holder of Company
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 Over-subscription 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 [ ], 1994 and assuming exercise
of all Rights.

Intent of RCN RCN has informed the Company that it intends to exercise
the [ ] Rights it will receive in respect of the shares
of Company Stock currently owned by RCN.

Transferability of
Rights The Rights are transferable, and it is anticipated that
they will trade on NASDAQ under the symbol "CTEXR." One
registered broker-dealer has indicated that it intends
to make a market in the Rights during the period the
Rights are outstanding. 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.

The Subscription/Information Agent will endeavor to
sell Rights for holders who deliver a Subscription
Certificate with the instruction for sale properly
executed to the Subscription/Information Agent by 11:00
a.m., New York City time, on [ ], 1994. See "The
Rights Offering--Method of Transferring Rights."

Record Date [ ], 1994 [the effective date of the Registration
Statement of which this Prospectus forms a part].

Expiration Date [ ], 1994 [21 calendar days after the Record Date],
at 5:00 p.m., New York City time.

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/Information Agent on or prior to the
Expiration Date. Any Rights holder subscribing for an
aggregate of more than 5000 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 5000 until the Expiration Date. The Company, in its
sole discretion, may determine to waive payment for
such number of Underlying Shares in excess of 5000
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 Company Stock whose addresses are outside the United
States or who have an APO or FPO address, but will be
held by the Subscription/Information Agent for their
account. To exercise such rights, such Holders must
notify the Subscription/Information Agent on or prior
to 11:00 a.m., New York City time, on [ ], 1994, at
which time (if no instructions have been received by
the Subscription/Information Agent) such Rights will be
sold, if feasible, and the net proceeds, if any,
remitted to such Holders. See "The Rights Offering--
Foreign and Certain Other Shareholders."

Persons Holding
Shares, or Wishing
to Exercise
Rights, Through
Others Persons holding shares of Company 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
Company 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.
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, are expected to be
approximately $300 million, assuming full exercise of
the Rights. The Rights Offering is, however, not
conditioned upon any minimum level of exercise of the
Rights. The proceeds from the Rights Offering will be
used for general corporate purposes. Specifically, the
Company expects that such proceeds, together with the
proceeds from the pending sale of the Company's
cellular properties, will be used primarily to expand
and develop certain of its existing cable television
and telephone systems into Full Service Networks and
for potential acquisitions, joint ventures and similar
strategic investments in the telecommunications
industry. See "Use of Proceeds and Corporate Strategy"
and "The Company--Operations--Mobile Services."

Subscription/
Information
Agent [to come]. See "Subscription/Information Agent."

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

SELECTED FINANCIAL AND OPERATING INFORMATION

The following selected historical financial information as of and for the
periods ended March 31, 1994 and March 31, 1993 is unaudited but, in the
opinion of the Company's management, includes all recurring adjustments
necessary for a fair presentation of the results of operations for such
periods. Information as of and for the three months ended March 31, 1994
and March 31, 1993 has been derived from, and should be read in conjunction
with, the Company's unaudited consolidated condensed financial statements
for such periods, which are included in the Company's Quarterly Report on
Form 10-Q for the three months ended March 31, 1994, which report is
incorporated by reference in this Prospectus. The results for such interim
periods are not necessarily indicative of the results for the full fiscal
year. The information as of and for the three fiscal years ended December
31, 1993 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, 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, which report is incorporated
by reference in this Prospectus and the Company's consolidated financial
statements for the three fiscal years ended December 31, 1992 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,
1992 as previously filed with the Commission. The information with respect
to the fiscal years ended December 31, 1990 and December 31, 1989 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, 1992, 1991 and 1990, 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, 1992, 1991 and 1990, respectively,
as previously filed with the Commission.

SUMMARY FINANCIAL AND OPERATING DATA
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AND OPERATING DATA)

Three Months Ended
Year Ended December 31, March 31,(1)
---------------------------------------------- ------------------
1989(2) 1990 1991 1992 1993 1993 1994
-------- -------- -------- -------- ------- -------- -------

CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Sales $161,005 $200,383 $232,818 $256,564 $283,987 $67,943 $71,987
Operating income before depreciation
and amortization 65,386 80,638 89,738 105,370 107,644 27,054 30,891
Depreciation and amortization 43,673 62,712 78,145 75,289 73,103 18,370 18,198
Operating income 21,713 17,926 11,593 30,081 34,541 8,684 12,693
Interest income 1,721 1,321 1,801 2,178 1,609 408 372
Interest expense (14,632) (31,889) (37,472) (37,321) (34,204) (8,557) (8,290)
Other income (expense) (11) (1,242) 685 291 1,408 10 268
Income (loss) before income taxes 8,791 (13,884) (23,393) 1,303 5,342 2,533 5,936
Provision (benefit) for income taxes 3,903 (3,782) (5,486) 3,284 10,714 2,328 2,690
Income (loss) before minority interest
and equity in unconsolidated entities 4,888 (10,102) (17,907) (1,981) (5,372) 205 3,246
Income (loss) from continuing operations
before cumulative effect of accounting
principle changes 5,787 (9,594) (19,415) (2,061) (5,486) (95) 2,829(3)
Cumulative effect of changes in accounting
principles -- -- -- -- (1,163) (1,163) (393)
Net income (loss) 4,460 (9,943) (12,392) (2,061) (6,649) (1,258) (425)
Net income (loss) per share .27 (.60) (.75) (.13) (.40) (.08) (.03)
Capital expenditures 52,146 69,657 55,050 51,207 59,142 20,561 11,905
CABLE:
Sales 35,868 63,925 76,128 85,299 93,550 22,816 23,680
Operating expenses(5) 37,358 72,747 80,589 85,070 90,931 21,840 22,067
Operating income before depreciation
and amortization(5) 14,807 28,056 35,401 40,937 44,328 11,368 12,032
Depreciation and amortization 16,297 36,878 39,862 40,708 41,709 10,392 10,419
TELEPHONE:
Sales 110,834 113,104 119,310 123,039 125,293 31,426 31,026
Operating expenses(5) 70,485 71,424 75,599 71,360 75,580 20,198 17,785
Operating income before depreciation
and amortization(5) 63,481 63,621 67,057 72,285 72,465 17,085 18,921
Depreciation and amortization 23,132 21,941 23,346 20,606 22,752 5,857 5,680
MOBILE SERVICES:(4)
Sales 6,466 10,753 13,993 18,687 24,810 4,932 7,062
Operating expenses(5) 10,670 13,551 25,956 27,723 26,354 5,453 6,802
Operating income (loss) before
depreciation and amortization(5) (933) (550) 1,442 3,552 5,590 1,276 1,997
Depreciation and amortization 3,271 2,248 13,405 12,588 7,134 1,797 1,737
COMMUNICATION SERVICES:
Sales 7,837 10,941 14,325 14,015 18,895 3,719 3,980
Operating expenses(5) 8,860 14,425 17,815 15,118 19,923 3,958 4,219
Operating income (loss) before
depreciation and amortization(5) (924) (3,351) (3,287) (891) (649) (157) (166)
Depreciation and amortization 99 133 203 212 379 82 73
LONG DISTANCE:
Sales - 1,660 9,062 15,445 21,383 5,034 6,230
Operating expenses(5) - 2,449 10,378 16,957 25,041 5,417 7,015
Operating income (loss) before
depreciation and amortization(5) - (742) (888) (1,163) (3,232) (322) (688)
Depreciation and amortization - 47 428 349 426 61 97
<FN>
___________________
1 Unaudited.
2 Restated to reflect a disposition accounted for as a discontinued operation.
3 Excludes extraordinary charge of $2,861 for debt prepayment penalty.
4 On April 1, 1994, the Company signed a definitive agreement for the sale of its cellular properties to ICN for
approximately $182,500. The sale is subject to FCC, antitrust and other approvals. For information on the pro
forma effect of such agreed sale, see "Pro Forma Condensed Consolidated Financial Statements."
5 Fiscal 1989 amounts have been restated to conform to the presentation in fiscal years 1990 through 1993 which
excludes the effects of allocated general corporate expenses on operating income (loss) before depreciation
and amortization and on operating expenses.

December 31, March 31,(1)
-------------------------------------------- ------------------
1989 1990 1991 1992 1993 1993 1994
-------- -------- -------- -------- ------- -------- -------

<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and temporary cash investments 6,306 24,057 49,636 58,837 60,182 56,055 52,526
Total assets 486,850 580,429 596,000 586,366 579,564 623,683 570,012
Long term debt 268,290 364,970 432,482 421,780 409,293 420,501 392,538
Common shareholders' equity 92,591 77,932 69,009 66,824 60,363 65,731 59,938
OPERATING DATA:(1)
CABLE SYSTEMS:
Homes passed 286,289 322,755 334,461 343,871 354,035 346,902 353,043
Basic Subscribers (approximate)(2) 175,000 197,000 207,000 218,000 224,000 219,000 225,000
Premium revenue per average
subscriber per month $7.75 $7.37 $6.61 $6.31 $6.01 $6.26 $6.09
TELEPHONE:
Access lines - business (approximate) 32,000 37,000 38,000 41,000 44,000 41,000 46,000
Access lines - residential
(approximate) 152,000 157,000 160,000 163,000 167,000 164,000 167,000
Access lines total (approximate) 184,000 194,000 198,000 204,000 211,000 205,000 213,000
Average daily carrier access
minutes of use(3) 1,705,313 1,789,721 1,884,622 1,940,051 2,146,046 2,122,795 2,426,021
Telephone employees 763 665 635 610 608 608 608
Telephone employees per 10,000
access lines 41.47 34.28 32.07 29.90 28.82 29.66 28.54
<FN>
___________________

1 Unaudited.
2 A home with one or more television sets connected to a cable television system is counted as one basic subscriber.
3 Access minute data was derived from the Telephone Group's revenue system for all toll
jurisdictions and divided by 365 to determine average daily usage.

</TABLE>

INVESTMENT CONSIDERATIONS

Each prospective purchaser should carefully examine all of the
information contained in this Prospectus and should give particular
consideration to the following risk factors:

Operating Losses

The Company has experienced losses from continuing operations since
1990 and may incur losses from continuing operations in the future. There
can be no assurance as to when, if ever, the Company will recognize a
profit from continuing operations.

Dividends

Since 1989, the Company has maintained a policy of not paying cash
dividends. The Company does not intend to alter this policy in the
foreseeable future. Certain debt instruments to which the Company is a
party contain restrictions on the payment of cash dividends on Company
Stock.

Use of Proceeds and Corporate Strategy

The Rights Offering is not conditioned upon any minimum level of
exercise of the Rights. Consequently, there can be no assurance that the
Company will raise the full amount of capital it is seeking to raise in the
Rights Offering, approximately $300 million. RCN has informed the Company
that it intends to exercise the Rights it receives for an aggregate
subscription price of $[ ].

The Company expects to use the net proceeds from the Rights Offering
to further its corporate strategy. More specifically, the Company expects
to use such proceeds, together with the proceeds from the pending sale of
the Company's cellular properties, to expand and develop certain of the
Company's cable television and telephone systems into Full Service Networks
and for potential acquisitions, joint ventures and other similar strategic
investments in the telecommunications industry. See "Use of Proceeds and
Corporate Strategy" and "The Company--Operations--Mobile Services." The
Company's plans for the establishment of such Full Service Networks are
still being developed and are subject to a number of variables, not all of
which are within the control of the Company.

The Company's ability to grow through acquisitions, joint ventures and
similar strategic investments in the telecommunications industry will
depend on the availability of reasonably priced properties, joint venture
opportunities and investments and on the Company's ability to compete
successfully for such properties, opportunities and investments against
other companies, including companies with greater financial resources than
the Company. The Company has no commitments for any material acquisition,
joint venture or investment, and there can be no assurance that appropriate
acquisition, joint venture and investment opportunities will arise in the
future.

Although substantially all of the proceeds from the Rights Offering
and the cellular sale are intended to be applied toward effecting the
Company's corporate strategy, such proceeds are not otherwise being
designated for any more specific purpose. Pending their utilization for
other corporate purposes, the Company expects to invest the proceeds from
the Rights Offering and the cellular sale primarily in Treasury
obligations, money market instruments and other similar securities.

Competition

The Company engages in various aspects of the telecommunications
industry, and certain of the businesses in which it engages are in highly
competitive sectors of the industry. In addition, as a result of
technological, regulatory and other legal developments, the Company faces
the risk of new or increased competition in virtually all businesses in
which it engages. Although these developments are expected to provide new
opportunities for the Company, it is not possible to predict their future
effect on the telecommunications industry in general or on the Company in
particular.

Regulation

Most of the businesses operated by the Company are subject to
extensive regulation. In recent years, the Company's Cable Group, like
other operators of cable television systems, has become subject to
extensive regulation at the federal, state and local levels. Many aspects
of such regulation are currently the subject of judicial proceedings and
administrative or legislative proceedings or proposals. On October 5,
1992, Congress passed the Cable Television Consumer Protection and
Competition Act of 1992 (the "Cable Act") which significantly expanded the
scope of regulation of 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. On April 1, 1993,
the FCC adopted its initial regulations on cable television rates, and on
February 22, 1994, the FCC adopted revised rate regulations that became
effective on May 15, 1994.

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 and technical standards -- will
reduce the operating margins of the Company's Cable Group. Otherwise, the
Company is currently unable to predict the effect that implementation of
the rate regulations and other provisions of the Cable Act will have on its
business and results of operations in future periods. No assurance can be
given at this time that such 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 on the Company in particular.

The Cable Group'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 Group's franchises
have been renewed or extended, generally at or prior to their stated
expirations and on acceptable terms. No assurance can be given in this
regard as to future franchise renewals. No one franchise accounts for more
than 10% of the Group's total revenue.

The Company's local exchange telephone subsidiary, Commonwealth
Telephone Company ("CTCo"), is subject to a rate-making process regulated
by the Pennsylvania Public Utility Commission ("PPUC"). Consequently, the
ability of the Company's Telephone Group to generate increased income and
cash flow is largely dependent on its ability to increase its subscriber
base, obtain higher message volumes and control its expenses. Following an
investigation by the PPUC in 1993, CTCo and the PPUC entered into an
agreement imposing certain requirements and restrictions on CTCo. These
requirements and restrictions are not expected to have a material adverse
effect on the Company.

Control by Principal Shareholder

On most matters, including the election of directors, the holders of
Common Stock and the holders of Class B Stock vote as a class with each
share of Common Stock entitled to one vote and each share of Class B stock
entitled to 15 votes. RCN controls over 50% of the total votes of all
outstanding shares of Company Stock. Consequently RCN is able to elect a
majority of the members of the Board of Directors of the Company and
thereby control the Company's policies and operations. In addition, RCN's
share ownership gives it the ability to control certain corporate actions
requiring shareholder approval. RCN will continue to control over 50% of
the total votes of all outstanding shares of Company Stock after the Rights
Offering and if no holders of Rights other than RCN exercise their Rights,
RCN will own [ ]% of the Common Stock, 59.6% of the Class B Stock and [ ]%
of the combined votes of all Company Stock. The control of the Company by
RCN may tend to deter nonnegotiated tender offers or other efforts to
obtain control of the Company and thereby deprive shareholders of
opportunities to sell shares at prices higher than those prevailing in the
market.

Relationship with RCN; Conflicts of Interest

RCN is a subsidiary of Kiewit Diversified Group, Inc. ("KDG"), which
is a wholly owned subsidiary of Peter Kiewit Sons', Inc. ("PKS"). KDG
owns 90% of RCN, and David C. McCourt, Chairman and Chief Executive
Officer of the Company, owns the remaining 10% of RCN. KDG owns
approximately 70% of and controls MFS Communications Company, Inc.
("MFS"). MFS provides a variety of telecommunications services, primarily
over its digital fiber optic telecommunications networks. Certain of the
officers and directors of the Company are also officers or directors of
PKS, KDG, RCN and MFS. As a result of the common control of the Company
and MFS, possible conflicts of interest could arise, for example, if either
the Company or MFS were presented with the opportunity to engage in a
business competing with the other or if the Company and MFS were to enter
into a business relationship together. Potential conflicts of interest
will be dealt with on a case-by-case basis taking into consideration
relevant factors including the requirements of NASDAQ and prevailing
corporate practices.

Uncertain Market for Rights

One registered broker-dealer has indicated to the Company that it
intends to make a market in the Rights. No assurance can be given,
however, regarding whether a 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.

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 Company
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 share of Common Stock exceeds the net
tangible book value per share of Company Stock. Accordingly, the
purchasers of the Common Stock in the Rights Offering will experience
immediate and substantial dilution. See "Dilution."

Based on the 7,962,266 shares of Common Stock and 8,547,327 shares of
Class B Stock outstanding as of June 30, 1994, 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. 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/Information Agent pursuant to the exercise of Rights pending
delivery of Underlying Shares.

USE OF PROCEEDS AND CORPORATE STRATEGY

The net cash proceeds from the Rights Offering are expected to be
approximately $300 million, assuming full exercise of all Rights. The
Rights Offering is not conditioned upon any minimum level of exercise of
the Rights. RCN has, however, informed the Company that it intends to
exercise the Rights it receives for an aggregate subscription price of $[ ].
The net proceeds from the Rights Offering will be used for general
corporate purposes. Specifically, the Company expects that, consistent
with its corporate strategy as described below, such proceeds, together
with the proceeds from the pending sale of the Company's cellular
properties, will be used primarily to expand and develop certain of the
Company's cable television and telephone systems into Full Service Networks
and for potential acquisitions, joint ventures and similar strategic
investments in the telecommunications industry. See "The Company--
Operations--Mobile Services."

The Company believes that the long term competitiveness of
telecommunications systems will be based upon the capacity to provide Full
Service Networks. Although the development of Full Service Networks is
still in the formative stage, the key components of these networks can be
found in various segments of the existing telecommunications industry.

The Company believes it is one of the few companies with experience in
the design, construction and operation of both telephone and cable
television systems. The Company has been in the cable television business
for nearly 15 years and has grown to be among the top 35 multiple system
operators in the country. The Company has been in the telephone business
for nearly 100 years. The Company's telephone operations have been among
the most efficient in the United States as measured by employees per 10,000
access lines and as measured by trouble reports.

The Company believes that it is well positioned to implement
competitive Full Service Networks designed around traditional cable
television and telephone systems as well as other platforms. The Company
intends to expand and develop certain of its existing cable television and
telephone systems into Full Service Networks and to expand the footprint
available for upgrade through acquisitions, joint ventures and similar
strategic investments in the telecommunications industry. The Company
intends to implement these expanded services at an early stage relative to
its competitors.

The Company believes that there will be acquisition and joint venture
opportunities involving system operators requiring the resources or expertise
to effectively develop competitive networks. With adequate capital
resources the Company believes it will be well positioned to take advantage
of such opportunities as they arise.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The principal market for the Common Stock is NASDAQ. The following
table indicates the high and low per-share sales prices for the Common
Stock as reported by NASDAQ for the periods indicated.

High Low
1992
First Quarter $16.25 $14.50
Second Quarter 15.00 10.75
Third Quarter 14.00 9.75
Fourth Quarter 15.25 10.00

1993
First Quarter 17.75 13.50
Second Quarter 25.00 15.75
Third Quarter 28.00 23.50
Fourth Quarter 33.50 23.75

1994
First Quarter 31.00 27.25
Second Quarter 28.50 24.50
Third Quarter(1)

________

(1) Through the close of business on [ ], 1994.

DILUTION

The pro forma net tangible book value of the shares of Company Stock
as of March 31, 1994, reflecting the sale of the cellular properties, was
approximately $79 million, or $4.78 per share. See "Pro Forma Condensed
Consolidated Financial Statements." "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 Company Stock outstanding. After giving effect to the sale by the
Company of the [ ] shares of Common Stock offered hereby and after
deducting the estimated offering expenses, the adjusted pro forma net
tangible book value of the Company as of March 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 $[ ]
Pro forma net tangible book value per share before offering $4.78
Increase per share attributable to shareholders
exercising Rights [ ]
Adjusted pro forma net tangible book value per share after
offering [ ]
------
Dilution to shareholders exercising Rights(1) $ [ ]
======
- ----------
(1) Dilution is determined by subtracting the pro forma 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 Company Stock as of [
], 1994 [the effective date of the Registration Statement of which this
Prospectus forms a part] (the "Record Date"). The Company will distribute
[ ] Rights for every [_____] shares of Company 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 price of $______ for the
Common Stock as quoted on NASDAQ on [ ], 1994, the day prior to the
commencement of the Rights Offering. There can be no assurance that the
Common Stock will trade at prices above the Subscription Price. See
"Investment Considerations--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 Company Stock on the Record Date for
more than one beneficial owner may, upon proper showing to the
Subscription/Information 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 Company Stock
who are also the record holders of such shares will receive more Rights
under certain circumstances than beneficial owners of Company Stock who are
not the record holders of their shares and who do not obtain (or cause the
record holder of their shares of Company 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 Company Stock or beneficial owners of
Company 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. RCN has
informed the Company that it intends to exercise the Rights it receives for
an aggregate subscription price of $[ ].

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

Expiration Date

The Rights will expire at 5:00 p.m., New York City time, on [ ], 1994
[21 calendar days after the Record Date] (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/Information 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.

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.

Exercise of Rights

Rights may be exercised by delivering to [to come] (the
"Subscription/Information 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 required
signatures 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 5000 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 5000 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, telegraphic or express money order payable to [to
come], as Subscription/Information Agent, or (b) wire transfer of same-day
funds to the account maintained by the Subscription/Information Agent for
such purpose at [to come.] Payments will be deemed to have been received by
the Subscription/Information Agent only upon (i) clearance of any
uncertified check, (ii) receipt by the Subscription/Information Agent of
any certified check or bank draft upon a U.S. bank or of any postal,
telegraphic or express money order or (iii) receipt of good funds in the
Subscription/Information 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:

[to come]

By Hand:

[to come]

By Overnight Courier:

[to come]

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/Information 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/Information Agent on or prior to the Expiration Date;

(ii) the Subscription/Information 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 C-TEC Corporation 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 (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/Information Agent of any
Subscription Certificate evidencing such Rights within five NASDAQ
trading days following the dates of the Notice of Guaranteed Delivery;
and

(iii) the properly completed Subscription Certificate evidencing
the Rights being exercised, with any required signatures guaranteed,
is received by the Subscription/Information Agent within five NASDAQ
trading days following the date of the Notice of Guaranteed Delivery
relating thereto. The Notice of Guaranteed Delivery may be delivered
to the Subscription/Information Agent in the same manner as
Subscription Certificates at the address set forth above, or may be
transmitted to the Subscription/Information Agent by telegram or
facsimile transmission (telecopy no. [to come]). Additional copies of
the form of Notice of Guaranteed Delivery are available upon request
from the Subscription/Information Agent, whose address and telephone
number are set forth under "Subscription/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 signature guarantee program acceptable to the Subscription/Information
Agent.

Holders who hold shares of Company 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/Information 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/INFORMATION 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/INFORMATION 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 nor the Subscription/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
Subscription/Information Agent, [to come], at its address set forth under
"Subscription/Information Agent" (telephone: [to come]).

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 NASDAQ under the symbol "CTEXR." Rights also may be sold in over-
the-counter and private sales transactions. One registered broker-dealer
has indicated that it intends to make a market in the Rights during the
period the Rights are outstanding. 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/Information 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.

The Rights evidenced by a Subscription Certificate also may be sold,
in whole or in part, through the Subscription/Information Agent by
delivering to the Subscription/Information Agent such Subscription
Certificate properly executed for sale by the Subscription/Information
Agent. If only a portion of the Rights evidenced by a single Subscription
Certificate are to be sold by the Subscription/Information Agent, such
Subscription Certificate must be accompanied by instructions setting forth
the action to be taken with respect to the Rights that are not to be sold.
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/Information Agent on the day such Rights are sold, less any
applicable brokerage commissions, taxes and other direct expenses of sale.
Promptly following such sale, the Subscription/Information Agent will send
the Rights holder a check for the net proceeds (after deduction of any
applicable brokerage commissions, taxes and other direct expenses of the
sale) from the sale of any Rights sold. The Company will pay the fees
charged by the Subscription/Information Agent for effecting such sales.
Orders to sell Rights must be received by the Subscription/Information
Agent prior to 11:00 a.m., New York City time, on [ ], 1994, and the
Subscription/Information Agent's obligation to execute orders is subject to
its ability to find buyers.

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/Information 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/Information 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/Information Agent
(which will be paid by the Company as described above), 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/Information Agent.

Procedures for DTC 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 ("DTC"; Rights exercised through DTC are
referred to as "DTC Exercised Rights"). The holder of a DTC Exercised
Right may exercise the Oversubscription Privilege in respect of such DTC
Exercised Right by properly executing and delivering to the
Subscription/Information Agent, at or prior to 5:00 p.m., New York City
time, on the Expiration Date, a DTC Participant Oversubscription Exercise
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
5000 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 5000 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 DTC Participant
Oversubscription Exercise Form may be obtained from the
Subscription/Information Agent.

Effect of Rights Offering on Other Securities
and Stock Options of the Company and Company Plans

The number of shares covered by certain stock options and the option
prices thereunder are subject to adjustment in accordance with the
provisions thereof. The Company's stock option plan or, in certain cases,
the stock option agreements evidencing awards made thereunder, require the
Compensation Committee of the Board of Directors (the "Committee") to make
appropriate adjustments to the outstanding options or other awards in the
event of any split-ups, stock dividends, recapitalizations, mergers,
consolidations, combinations, exchanges of shares and the like (each an
"adjustment event"). The Committee, whose determination shall be
conclusive, has discretion to determine the nature and extent of the
adjustments to be made in order to make the outstanding options or awards,
immediately after such adjustment event, equivalent to such options or
awards immediately prior to such adjustment event.

The Committee will meet to determine whether the Rights Offering is an
adjustment event and if so, what adjustment to make.

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 RCN

RCN will receive [ ] Rights in respect of the shares of Company Stock
it owns, and such Rights represent 34.5% of the total Rights to be
distributed. RCN has informed the Company that it intends to exercise the
Rights it receives for an aggregate subscription price of $[ ]. If RCN is
the only holder to exercise its Rights, it will own approximately 59.6% of
the Class B Stock and [ ]% of the Common Stock.

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/Information Agent for their account.
To exercise such Rights, such Holders must notify the
Subscription/Information Agent on or prior to 11:00 a.m., New York City
time, on [_______], 1994, at which time (if no instructions have been
received by the Subscription/Information Agent) the Rights represented
thereby will be sold, if feasible, and the net proceeds, if any, remitted
to such Holders. 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/Information 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 Company 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 Company Stock as a
capital asset and who receive Rights in respect of such Company Stock in
the issuance (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 Company 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 Company 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 Company 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 Company Stock to the
Rights, then upon exercise or transfer of the Rights, the shareholder's
basis in such Company Stock will be allocated between the Company 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 Company Stock will include
the shareholder's holding period for the Company 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 Company 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.

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On April 1, 1994, the Company signed a definitive agreement (the
"Cellular Agreement") for the sale of its cellular properties to ICN for
approximately $182.5 million, subject to certain adjustments at closing.
The parties to the Cellular Agreement are ICN, the Company and the
following subsidiaries of the Company: Cellular Plus, Inc., Cellular Plus
Services, Inc., C-TEC Cellular Centre County, Inc., and Cellular Plus of
Iowa, Inc. The sale is subject to FCC, antitrust and other approvals, and
is expected to close during the third quarter of 1994. The following
unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31,
1994 gives effect to the agreed sale as though it had occurred on March 31,
1994. The following unaudited Pro Forma Condensed Consolidated Statements
of Operations for the three months ended March 31, 1994 and the year ended
December 31, 1993 give effect to the agreed sale as though it had occurred
on January 1, 1993. These pro forma financial statements should be read in
conjunction with the Company's historical consolidated financial statements
and notes thereto contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 1993 and in the quarterly report on Form 10-Q
for the three months ended March 31, 1994. The Pro Forma Condensed
Consolidated Statements of Operations and Balance Sheet are not necessarily
indicative of the actual results of operations or financial position which
would have been reported if the agreed sale had occurred on the respective
dates referred to above nor do they purport to indicate the results of
future operations or financial position of the Company. In the opinion of
management, all adjustments necessary to present fairly such pro forma
financial statements have been made.

Pro Forma Condensed Consolidated Balance Sheet
(Dollars in Thousands)
(Unaudited)

March 31,
1994 Pro Forma
(actual) Adjustments(a) Pro Forma
-------- ------------- ----------

ASSETS
Current Assets
Cash and temporary cash
investments $ 52,526 $138,451 $190,977
Other current assets 45,939 (1,544) 44,395
Deferred income taxes 2,459 (20) 2,439
-------- -------- --------
Total current assets 100,924 136,887 237,811
-------- -------- --------

Property, Plant and Equipment
Telephone plant 384,586 - 384,586
Cable plant 177,905 - 177,905
Cellular plant 27,893 (25,286) 2,607
Other property, plant and
equipment 11,663 - 11,663
-------- -------- --------
Total property, plant and
equipment 602,047 (25,286) 576,761
Accumulated depreciation 257,852 8,594 249,258
-------- -------- --------
Net property, plant and equipment 344,195 (16,692) 327,503
-------- -------- --------
Investments 14,578 (1,118) 13,460
-------- -------- --------
Intangible Assets, Net 99,166 (34,285) 64,881
-------- -------- --------
Deferred Charges 11,149 - 11,149
-------- -------- --------
Total Assets $570,012 $ 84,792 $654,804
======== ======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Note payable to bank $ 826 $ - $ 826
Current maturities of long-term
debt and preferred stock 9,444 (416) 9,028
Advance billings and customer
deposits 7,976 (304) 7,672
Accrued taxes 11,760 (33) 11,727
Accrued interest 4,286 (39) 4,247
Other current liabilities 35,956 (3,599) 32,357
-------- -------- --------
Total current liabilities 70,248 (4,391) 65,857
-------- -------- --------
Long-Term Debt 392,538 (1,405) 391,133
-------- -------- --------
Deferred Income Taxes and
Investment Tax Credits 32,125 9,134 41,259
-------- -------- --------
Other Deferred Credits 12,680 - 12,680
-------- -------- --------
Minority Interest 2,209 (2,209) -
-------- -------- --------
Redeemable Preferred Stock 274 - 274
-------- -------- --------

Common Shareholders' Equity
Common stock 16,887 - 16,887
Additional paid-in capital 20,635 - 20,635
Retained earnings 27,704 83,663 111,367
Treasury stock at cost,
377,842 shares at
March 31, 1994 (5,288) - (5,288)
-------- -------- --------
Total common shareholders'
equity 59,938 83,663 143,601
-------- -------- --------

Total Liabilities
and Shareholders' Equity $570,012 $ 84,792 $654,804
======== ======== ========

See accompanying Notes to Pro Forma Condensed Consolidated Financial
Statements.

Pro Forma Condensed Consolidated Statement of Operations
For the Three Months Ended March 31, 1994
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)

Quarter Ended
March 31,
1994 Pro Forma
(actual) Adjustments(b) Pro Forma(c)
-------- ------------- ----------

Sales $71,987 $(6,407) $65,580
Costs & Expenses 59,294 (5,989) 53,305
-------- -------- -------
Operating Income 12,693 (418) 12,275

Interest Income 372 (21) 351
Interest Expense (8,290) (40) (8,250)
Gain on Sale of Pennsylvania
Cable Properties 893 - 893
Other Income, Net 268 (1) 267
-------- -------- -------
Income Before Income Taxes 5,936 (400) 5,536

Provision For Income Taxes 2,690 (291) 2,399
-------- -------- -------
Income Before Minority Interest
and Equity in Unconsolidated
Entities 3,246 (109) 3,137

Minority Interest in Income of
Consolidated Entities (216) 190 (26)
Equity in Loss of
Unconsolidated Entities (201) (36) (237)
-------- -------- -------
Income Before Extraordinary Charge
and Cumulative Effect of
Accounting Principle Change 2,829 45 2,874
======== ======== ========

Earnings (Loss) Per Average Common Share
Income before extraordinary charge
and cumulative effect of
accounting principle change $ .17 $ .17
======== ========
Average Common Shares
Outstanding 16,509,593 16,509,593

See accompanying Notes to Pro Forma Condensed Consolidated Financial
Statements.

Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1993
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)

Year ended
December 31,
1993 Pro Forma
(actual) Adjustments(b) Pro Forma(c)
-------- ------------- ----------

Sales $283,987 $(22,570) $261,417

Costs and Expenses 244,421 (22,924) 221,497
Nonrecurring Charges 5,025 - 5,025
-------- -------- ---------

Operating Income 34,541 354 34,895

Interest Income 1,609 1,609
Interest Expense (34,204) (184) (34,020)
Gain on Sale of Marketable
Equity Securities 1,988 - 1,988
Other Income, Net 1,408 (62) 1,346
-------- -------- ---------
Income Before Income Taxes 5,342 476 5,818
-------- -------- ---------
Provision for Income Taxes 10,714 (830) 9,884
-------- -------- ---------

Loss Before Minority Interest
and Equity in Unconsolidated
Entities (5,372) 1,306 (4,066)
-------- -------- ---------
Minority Interest in Income of
Consolidated Entities (341) 256 (85)
Equity in Income of Unconsolidated
Entities 227 (155) 72
-------- -------- ---------

Loss Before Cumulative Effect of
Accounting Principle Changes (5,486) 1,407 (4,079)
======== ======== ========

(Loss) Earnings Per Average Common Share
Loss before cumulative effect
of accounting principle changes $ (.33) $ (.25)
======== ========
Average Common Shares
Outstanding 16,506,494 16,506,494

See accompanying Notes to Pro Forma Condensed Consolidated Financial
Statements.

Notes to Pro Forma Condensed Consolidated Financial Statements

a) Adjustments to record the disposition of cellular properties. The
adjustments assume that the sale proceeds, net of income taxes
estimated to be payable after the utilization of certain net
operating loss carryforwards, are retained as temporary cash
investments. The adjustments assume the realization of deferred tax
assets of approximately $18 million, representing the tax benefits
associated with the utilization of approximately $52.7 million net
operating loss carryforwards. Adjustments also assume a reduction
in a related valuation allowance for deferred tax assets of
approximately $6 million. An after-tax gain of approximately $77
million was assumed to be recognized on the sale. Certain working
capital adjustments to the sales price to be made at closing were
estimated to be approximately $2.5 million based on the historical
asset and liability balances at March 31, 1994.

b) Adjustments to eliminate the historical results of operations of the
cellular properties. Corporate overhead allocated to the cellular
operations has not been eliminated since that overhead would have
been reallocated to other business segments.

c) The Pro Forma Consolidated Statements of Operations exclude a
non-recurring after-tax gain of approximately $77 million expected
to be realized on the sale, any gain or loss resulting from the
curtailment of the pension obligation related to employees of the
Company's cellular operations, and the reversal of a valuation
allowance for deferred tax assets of approximately $6 million.

THE COMPANY

The Company was organized in 1979. It is incorporated under the laws
of the Commonwealth of Pennsylvania and has its principal office in Wilkes-
Barre, Pennsylvania. The Company is a holding company with wholly-owned
subsidiaries, which are engaged in various aspects of the
telecommunications industry and which are organized into five principal
groups - Telephone, Cable, Communications Services, Mobile Services, and
Long Distance. Through its wholly-owned subsidiaries, the Company also has
ownership interests in a number of other entities providing
telecommunications services.

Financial information regarding the Company's industry segments is set
forth in footnote 14 to the Consolidated Financial Statements included in
the Company's Annual Report on Form 10-K for the year ended December 31,
1993, which is incorporated herein by reference.

As of December 31, 1993, the Company had 1,282 full-time employees
including general office and administrative personnel.

Operations

Telephone

The Telephone Group consists of a Pennsylvania public utility
providing local telephone service to a 19 county, 5,067 square mile service
territory in Pennsylvania. As of May 31, 1994, the Telephone Group
provided service to approximately 214,000 main access lines. Of these
168,000 were residential and 46,000 primarily related to business. This
Group's operating territory is rural, containing only 38.8 access lines per
square mile as compared to a Pennsylvania average of 151.0 lines per square
mile. The Group's 79 central offices serve an average of 2,500 lines and
65 square miles.

In addition to providing local telephone service, this Group provides
network access and billing and collection services to interexchange
carriers. This Group also has other revenues which are considered non-
regulated and primarily relate to telecommunications equipment sales and
services and billing/collection services for interexchange long distance
carriers.

Intralata toll bypass and alternative local access telephone service
providers are potential competitive threats, although no significant
competition has occurred to date. Intralata toll and access revenue
comprise a significant portion of the Group's business.

Cable

During 1993, the Cable Group restructured rates and channel offerings
to comply with the basic rate regulations and to minimize the impact on
revenue of the Cable Act. The future impact of the Cable Act on the Cable
Group and the cable television industry is still unclear. The Cable
Group's 1993 operating results were not significantly impacted by the Cable
Act. See "Investment Considerations--Regulation."

The Group'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 Group's franchises
have been renewed or extended, generally at or prior to their stated
expirations and on acceptable terms. During 1993, the Cable Group
completed negotiations with 64 communities resulting in franchise renewals
on terms which are acceptable to the Group. The Cable Group has 369
franchises, 63 of which are due for renewal within the next three years.
No one franchise accounts for more than 10% of the Group's total revenue.

Competition for the Group's services traditionally has come from a
variety of providers including broadcast television, video cassette
recorders and home satellite dishes. Direct broadcast satellite (DBS)
which will allow consumers to receive cable programming for a fee once they
purchase a receiving dish and a set-top terminal may increase competition
in the future. Two DBS Companies are scheduled to launch their services in
1994. 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 recently announced mergers of various
telephone and cable companies has heightened the concerns about competition
in the future. The current regulatory environment appears to be fostering
competition in cable television by telephone companies, and in telephone by
cable companies. These regulations are still evolving. The Cable and
Telephone Groups continue to monitor the progress of regulations affecting
the telecommunications industry and are developing a business plan to meet
future competition. It is impossible to predict at this time the impact of
these technological and regulatory developments on the cable television
industry in general or on the Cable Group in particular.

Mobile Services

On April 1, 1994, the Company signed a definitive agreement for the
sale of its cellular properties to ICN for approximately $182.5 million.
The sale is subject to FCC, antitrust and other approvals. For information
on the pro forma effect of such agreed sale, see "Pro Forma Condensed
Consolidated Financial Statements."

The Mobile Services Group currently operates cellular telephone
systems in MSAs and RSAs throughout eight counties in Northeastern and
Central Pennsylvania and 24 counties in Southeast Iowa, serving a total
population of 1.5 million. The Group also operates paging and message
management services in Northeastern Pennsylvania.

The Company's Pennsylvania and Iowa cellular territories each consist
of two MSAs and three RSAs. Pursuant to FCC regulations only two cellular
providers are allowed in each MSA and RSA. Thus, the Group has competition
from one other cellular provider in each MSA and RSA.

The Group's service territory was increased with the activation of
three new cell sites in Pennsylvania in 1993. The Iowa cellular properties
benefitted from four new cell sites in 1993. The Group increased
subscribers by approximately 53% in 1993.

In 1993, the Group introduced a call delivery Supersystem. Through a
key strategic relationship with a neighboring service provider in
Pennsylvania, the Group is now able to offer over 14,000 square miles of
seamless cellular service in major surrounding travel corridors. The
Supersystem allows customers to have cells automatically delivered to their
roaming location in the Supersystem. Callers need only dial the customary
seven-digit cellular phone number to contact the customer; roaming access
numbers and codes are no longer necessary. To be competitive, the Group
eliminated daily roaming charges and reduced roaming rates throughout the
Supersystem area.

Also instrumental in the subscriber growth has been the success of the
Group's venture in the retail arena. The first Company-operated retail
location (a "Kiosk") was opened in the fourth quarter of 1992. During
1993, the group added four additional Kiosks in key population areas in the
Pennsylvania market. The Kiosks allow the Group to reach the ever-growing
consumer market by being strategically positioned in major shopping malls,
providing added shopping convenience and a continued marketing presence.

Communication Services

The Communications Services Group presently carries on business
principally in the Northeastern United States providing telecommunications-
related engineering and technical services. These services are provided
out of the Group headquarters in Wilkes-Barre, Pennsylvania, and regional
offices in Pennsylvania, New York and Virginia.

The services provided by the Group include telephony engineering;
system integration; operation and management of telecommunications
facilities for large corporate clients, hospitals and universities; and
installation of premises distribution systems in large campus environments.
In addition, the Communications Services Group sells, installs and
maintains private branch exchanges (PBXs) in Pennsylvania and New Jersey.
The Group has also expanded its engineering services to include video and
data engineering, and successfully implemented several major projects
during 1993.

The Group encounters major competition from interexchange carriers,
regional bell operating companies, independent telephone companies, system
integrators, interconnect companies and small independent consultants. The
competition from various sources results in significant downward pressure
on the prices and margins for the services the Group provides. The Group's
cost effective operations, competitive pricing, flexibility to meet
customer requirements, and reputation in the telecommunications industry
for quality service have been its primary strengths against the
competition.

Long Distance

The Long Distance Group operates in Pennsylvania. The Group began
operations in 1990 by servicing the local area of the Telephone Group. In
late 1992, the Long Distance Group entered the Wilkes-Barre/Scranton
territory served by Bell Atlantic. In late 1993, the Group established
sales offices in additional markets in Philadelphia, Pittsburgh, Harrisburg
and Allentown. The primary focus in these markets is to provide services
to residential and business customers.

The Long Distance Group is essentially a "reseller" of several types
of services and employs the networks of several long distance providers on
a wholesale basis. As a result of market share growth, in 1993 the Group
procured its own long distance switch which allows customers to choose the
Long Distance Group as their long distance provider and dial the common
"1+" to use the service. This switched service enables the Company to
provide quality services such as private line services, 800 services,
operating services and calling card services at reduced rates. The Group
also provides telemarketing services, primarily to cable companies.

Additionally, the Long Distance Group recognized the need for access
to AT&T services to sell nationwide to large business customers with
multiple locations. In 1992, the Group procured an AT&T Tariff 12
agreement and provides this service as an additional line of business.

The interexchange (long-distance) carrier market is crowded and
competitive. Recent industry surveys indicate an estimated 350-400
interexchange carriers in operation. A key development was the rapid
revenue growth by regional and niche oriented companies. Although the top
three carriers (AT&T, MCI and Sprint) account for almost 90% of all
interexchange carrier revenue, that share may decline as other
interexchange carrier revenue grows.

Intense competition in the mid-sized business market reflects the
rapid growth of business customer revenue. The residential market is still
dominated by the top three carriers. However, this domination may decline
given increased price pressure combined with more aggressive marketing by
the regional carriers.

In Pennsylvania, the Long Distance Group has mirrored the overall
growth statistics of the regional carriers. Competition for the mid-sized
business market has come from other similarly situated carriers rather than
the top three. The primary deviation from industry growth trends is seen
in the residential market segment in the Telephone Group's operating
territories. Here the Long Distance Group has continued to hold the
predominant market share. A combination of value priced products,
exceptional customer service and aggressive marketing activities has been
the Group's primary strength against competition.

DESCRIPTION OF CAPITAL STOCK

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

The authorized capital stock of the Company is 43,753,203 shares,
consisting of 35,000,000 shares of Common Stock, par value $1.00 per share,
and 8,753,203 shares of Class B Stock, par value $1.00 per share. As of
June 30, 1994, the Company had outstanding 7,962,266 shares of Common Stock
and 8,547,327 shares of Class B Stock.

Voting Rights and Powers

With respect to all matters upon which shareholders are entitled to
vote (including the election of directors) or to which shareholders are
entitled to give consent, except as provided in the next sentence, the
holders of the outstanding shares of the Common Stock and the holders of
any outstanding shares of the Class B Stock shall vote together without
regard to class, and every holder of the outstanding shares of the Common
Stock shall be entitled to cast one vote for each share of the Common Stock
held, and every holder of any outstanding shares of the Class B Stock shall
be entitled to cast fifteen votes for each share of the Class B Stock held.
However, with respect to any proposed amendment to the Articles of
Incorporation which would (i) increase or decrease the par value of any
class, (ii) alter or change the preferences, qualifications, limitations,
restrictions or special or relative rights of the shares of any class so as
to affect the holders of such class adversely, (iii) increase the
authorized number of shares of any class, (iv) authorize a new class of
shares senior or superior in any respect to the shares of any class, or (v)
increase the number of authorized shares of any class senior or superior in
any respect to the shares of any class then authorized, the approval of a
majority of the votes entitled to be cast by the holders of the class
affected by the proposed amendment, voting separately as a class, shall be
obtained in addition to the approval of a majority of the votes entitled to
be cast by the holders of the Common Stock and the Class B Stock voting
together without regard to class as described above.

Dividends and Distributions

Cash Dividends

At any time shares of the Class B Stock are outstanding, as and when
cash dividends may be declared by the Board of Directors, the cash
dividends payable on shares of the Common Stock shall be in all cases at
least 105% of the cash dividend payable on shares of the Class B Stock.

Other Dividends and Distributions

In the case of dividends in the form of stock or other property of the
Company, each share of the Common Stock and each share of the Class B Stock
is equal in respect of rights and dividends except that in the case of
dividends or other distributions payable in stock or stock split-ups or
divisions, shares of the Class B Stock shall be distributed only with
respect to the Class B Stock and shares of the Common Stock may be
distributed with respect to both the Common Stock and the Class B Stock.

Other Rights

Except as otherwise required by the Pennsylvania Business Corporation
Law or as otherwise provided in the Articles of Incorporation, each share
of the Common Stock and each share of the Class B Stock has identical
powers, preferences and rights, including rights in liquidation.

Conversion of Class B Stock

Shares of Class B Stock shall be convertible at the option of the
respective holders thereof, at any time, into fully paid and nonassessable
shares of Common Stock on the basis of one share of Common Stock for each
share of Class B Stock. Any holder of shares of the Class B Stock may
elect to convert any or all of such shares at one time or at various times,
in such holder's discretion.

No payment or adjustment with respect to dividends on shares of the
Common Stock or on the Class B Stock shall be made in connection with any
conversion of shares of Class B Stock into shares of Common Stock except
for those shares of the Class B Stock converted subsequent to the record
date for the payment of a stock or cash dividend or other distribution on
the shares of the Class B Stock but prior to such payment. In such an
instance, the stock or cash dividend or other distribution will be paid on
the Class B Stock to the registered holder of such shares as of the close
of business on the record date as if no conversion had been made.

In the event of any capital reorganization or any reclassification of
the Common Stock (except for reorganizations or reclassifications involving
a subdivision or combination of outstanding shares of the Common Stock),
the shares of the Class B Stock shall thereafter have the right to be
converted into the number of shares of stock or other securities or
property of the Company to which outstanding shares of the Common Stock
would have been entitled upon the effective date of the reorganization or
reclassification.

If the shares of the Common Stock or the Class B Stock at any time
outstanding shall, by reclassification or otherwise, be subdivided into a
greater number of shares or combined into a lesser number of shares, the
shares of Class B Stock or Common Stock, respectively, then outstanding
shall, at the same time, be subdivided or combined, as the case may be, on
the same basis.

Liquidation Preferences

In the event of dissolution, liquidation or winding up of the Company
whether voluntary or involuntary, holders of the Company Stock shall be
entitled to payment out of the assets of the Company ratably in accordance
with the number of shares held by them, respectively.

Duration of Class Rights and Powers

At any time when less than 25,000 shares of Class B Stock are
outstanding any shares of the Class B Stock which are then outstanding
shall without any action by the Board of Directors or the holder or holders
thereof, automatically convert into and become for all purposes shares of
Common Stock, and the provisions of the Articles of Incorporation which
provide for different voting or cash dividend rights for the Common Stock
and the Class B Stock shall not be of any effect. All shares of either or
both the Common Stock or the Class B Stock which are then outstanding shall
have equal and general voting power in all matters upon which shareholders
of the Company are entitled to vote or give consent, even if at such time
there shall have been fixed by the Board of Directors a record date for
voting of any meeting of shareholders.

General

The transfer agent and registrar for the Company's shares of Common
Stock and Class B Stock is [ ].

Common Stock Outstanding after Rights Offering

Approximately [ ] shares of Common Stock will be issued in connection
with the Rights Offering assuming exercise of all Rights. Based on the
7,962,266 shares of Common Stock outstanding as of June 30, 1994, 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 are listed on NASDAQ under
the symbol "CTEX."

PLAN OF DISTRIBUTION

The Company has agreed to pay broker-dealers fees for their soliciting
efforts (the "Soliciting Fees") equal to $0.25 per share of Common Stock
for each share of Common Stock issued pursuant to the exercise of Rights
subject to a maximum Soliciting Fee of $250 in the case of each person
beneficially purchasing more than 1,000 shares of Common Stock pursuant to
the exercise of Rights. The Soliciting Fees will be paid directly to a
broker-dealer designated on the applicable portion of the Subscription
Certificate. Soliciting Fees will not be paid on any undesignated exercise
of Rights.

SUBSCRIPTION/INFORMATION AGENT

The Company has appointed [ ] as Subscription/Information Agent for
the Rights Offering. The Subscription/Information 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 [ ]. Any questions or requests for additional copies of this
Prospectus, the instructions or the Notice of Guaranteed Delivery may be
directed to the Subscription/Information Agent at the telephone number and
address above.

The Company will pay the fees and expenses of the
Subscription/Information Agent, and has also agreed to indemnify the
Subscription/Information Agent from any liability which it may incur in
connection with the Rights Offering. Inquiries by all holders of Rights
should be directed to the Stockholder Relations Department (telephone [ ]);
Holders may also consult their brokers or nominees.

LEGAL MATTERS

The validity of the authorization and issuance of the securities
offered hereby is being passed upon Raymond B. Ostroski, 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 consolidated balance sheets as of December 31, 1993 and 1992 and
the consolidated statements of operations, common shareholders' equity, and
cash flows for each of the three years in the period ended December 31,
1993, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report, which includes an explanatory paragraph
referring to the Company's change in methods of accounting for income taxes
and postretirement benefits other than pensions, of Coopers & Lybrand,
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, [LOGO]
if given or made, such information or
representation must not be relied
upon as having been sanctioned or
authorized by the Company. Neither the C-TEC
delivery of this Prospectus nor any sale Corporation
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 anyone in any Common Stock
jurisdiction in which the person making such
offer or solicitation is not qualified
do so or to any person to whom it is
unlawful to make such offer or solicitation.

TABLE OF CONTENTS
PROSPECTUS
Page

Available Information 2
Documents Incorporated by Reference 2
Prospectus Summary 3
Investment Considerations 10
Use of Proceeds and Corporate
Strategy 13
Price Range of Common Stock and
Dividend Policy 14
Dilution 15
The Rights Offering 15
Certain Federal Income Tax
Consequences 22
Pro Forma Condensed Consolidated
Financial Statements 23
The Company 27
Description of Capital Stock 30
Plan of Distribution 33
Subscription/Information Agent 33
Legal Matters 33 Dated [ ], 1994
Experts 33

====================================== ======================================

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 NASDAQ
National Market listing fees.

SEC registration fee $114,998

NASDAQ listing fee *

Financial Advisor's fees and expenses *

Subscription/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

Reference is made to Sections 1741 and 1742 of the 1988 Business
Corporation Law of the Commonwealth of Pennsylvania, which provide for
indemnification of directors and officers in certain circumstances. In
addition, Article IV of the By-laws of C-TEC provides that, except as
prohibited by law, any director or officer of C-TEC is entitled to be
indemnified in any action or proceeding in which he or she may be involved
by virtue of holding such position.

In addition, C-TEC 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

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

24 - 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/Information Agency Agreement.*

- ----------
*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.

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 Wilkes-Barre, Commonwealth of
Pennsylvania, on the 1st day of July, 1994.

C-TEC CORPORATION

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, Bruce Godfrey 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

/s/ David C. McCourt Director, Chairman and
- ---------------------- Chief Executive Officer June 30, 1994
David C. McCourt

/s/ Michael J. Mahoney President and
- ---------------------- Chief Operating Officer June 30, 1994
Michael J. Mahoney

/s/ Bruce Godfrey Executive Vice President
- ----------------------- and Chief Financial Officer June 30, 1994
Bruce Godfrey

/s/ James Q. Crowe
- ----------------------- Director June 30, 1994
James Q. Crowe

/s/ Walter E. Scott, Jr
- ----------------------- Director June 30, 1994
Walter E. Scott, Jr.

/s/ Richard R. Jaros
- ----------------------- Director June 30, 1994
Richard R. Jaros

/s/ Robert E. Julian
- ----------------------- Director June 30, 1994
Robert E. Julian

/s/ Thomas C. Stortz
- ----------------------- Director June 30, 1994
Thomas C. Stortz

/s/ David C. Mitchell
- --------------------- Director June 30, 1994
David C. Mitchell

/s/ Frank M. Henry
- --------------------- Director June 30, 1994
Frank M. Henry

/s/ Donald G. Reinhard
- ---------------------- Director June 30, 1994
Donald G. Reinhard

- ---------------------- Director ______________
Eugene Roth, Esquire

/s/ Stuart E. Graham
- ---------------------- Director June 30, 1994
Stuart E. Graham

EXHIBIT INDEX

Exhibit
Number Description of Document

5 - Opinion of Raymond B. Ostroski*

23(a)- Consent of Coopers & Lybrand.

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

24 - 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/Information Agency Agreement*

- ----------
*To be supplied by amendment.

Exhibit 23(a)

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statement
of C-TEC Corporation on Form S-3 of our report, which includes an
explanatory paragraph referring to the Company's change in methods of
accounting for income taxes and postretirement benefits other than
pensions, dated March 4, 1994, on our audits of the consolidated financial
statements and financial statement schedules of C-TEC Corporation as of
December 31, 1993 and 1992, and for the years ended December 31, 1993, 1992
and 1991, which report is included in C-TEC Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993. We also consent to
the references to our firm under the caption "Experts".

/s/ Coopers & Lybrand
Philadelphia, PA
June 30, 1994

EXHIBIT 99(a)

C-TEC CORPORATION SUBSCRIPTION CERTIFICATE NO.
CUSIP NO. __________________

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE
COMPANY'S PROSPECTUS DATED ________, 1994 (THE "PROSPECTUS") AND ARE
INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE
AVAILABLE UPON REQUEST FROM THE SUBSCRIPTION/INFORMATION AGENT.
THIS CERTIFICATE OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
SUBSCRIPTION/INFORMATION AGENT WITH PAYMENT IN FULL BY 5:00 P.M., NEW
YORK CITY TIME, ON ________, 1994 (THE "EXPIRATION DATE").

The Rights represented by this subscription certificate may be exercised
by duly completing Form 1; and may be transferred, assigned, exercised or
sold through a bank or broker by duly completing Form 2; and may be sold
through the Subscription/Information Agent by duly completing Form 3.
Rights holders are advised to review the Prospectus and instructions,
copies of which are available from the Subscription/Information Agent
before exercising or selling their Rights. IMPORTANT: Complete appropriate
FORM and, if applicable, delivery instructions, and SIGN on reverse side.

SUBSCRIPTION PRICE $__ PER SHARE RIGHTS TO PURCHASE COMMON SHARES OF
C-TEC CORPORATION

[Name and Address of Registered Holder]

The registered owner whose name is inscribed hereon, or assigns,
is entitled to subscribe for shares of Common Stock upon the terms and
subject to the conditions set forth in the Prospectus and instructions
relating thereto.

By . . . . . . . . . . . . . . . . By . . . . . . . . . . . . . . . .
Michael J. Mahoney Bruce Godfrey
President Executive Vice President and
Chief Financial Officer

THIS SUBSCRIPTION CERTIFICATE IS TRANSFERABLE AND MAY BE COMBINED OR
DIVIDED (BUT ONLY INTO SUBSCRIPTION CERTIFICATES EVIDENCING A WHOLE NUMBER
OF RIGHTS) AT THE OFFICE OF THE SUBSCRIPTION/INFORMATION AGENT.

RIGHTS HOLDERS SHOULD BE AWARE THAT IF THEY CHOOSE TO EXERCISE OR
TRANSFER LESS THAN ALL OF THE RIGHTS EVIDENCED HEREBY, THEY MAY NOT RECEIVE
A NEW SUBSCRIPTION CERTIFICATE IN SUFFICIENT TIME TO EXERCISE THE REMAINING
RIGHTS EVIDENCED THEREBY.

FORM 1--EXERCISE AND SUBSCRIPTION: The undersigned hereby irrevocably
exercises one or more Rights to subscribe for shares of Common Stock, as
indicated below, on the terms and subject to the conditions specified in
the Prospectus, receipt of which is hereby acknowledged.

(a) Number of shares subscribed for pursuant to the Basic
Subscription Privilege (one Right needed to subscribe for each full share):
__________

(b) Number of shares subscribed for pursuant to the Oversubscription
Privilege: __________

(c) Total Subscription Price (total number of shares subscribed
for--pursuant to both the Basic Subscription Privilege and the
Oversubscription Privilege--times the Subscription Price of $___):
$__________ (1)

METHOD OF PAYMENT (CHECK ONE)

--
/ / CHECK, BANK DRAFT OR MONEY ORDER PAYABLE TO [ ]
--

--
/ / WIRE TRANSFER DIRECTED TO [ ] ABA NO.
-- [ ] (MARKED: ``C-TEC CORPORATION SUBSCRIPTION'').

(d) If the number of Rights being exercised pursuant to the Basic
Subscription Privilege is less than all of the Rights represented by the
Subscription Certificate (check only one):

--
/ / DELIVER TO ME A NEW SUBSCRIPTION CERTIFICATE EVIDENCING THE REMAINING
-- RIGHTS TO--WHICH I AM ENTITLED.

--
/ / DELIVER A NEW SUBSCRIPTION CERTIFICATE EVIDENCING THE REMAINING RIGHTS
-- IN ACCORDANCE WITH MY FORM 2 INSTRUCTIONS (which include any required
signature guarantees).

--
/ / SELL THE REMAINING UNEXERCISED RIGHTS IN ACCORDANCE WITH MY FORM
-- 3 INSTRUCTIONS.

--
/ / CHECK HERE IF RIGHTS ARE BEING EXERCISED PURSUANT TO A NOTICE OF
-- GUARANTEED DELIVERY DELIVERED TO THE SUBSCRIPTION/INFORMATION
AGENT PRIOR TO THE DATE HEREOF AND COMPLETE THE FOLLOWING:

Name(s) of Registered Owner(s) . . . . . . . . . . . . . .
Window Ticket number (if any) . . . . . . . . . . . . . . .
Date of Execution of Notice of Guaranteed Delivery. . . . .
Name of Institution which Guaranteed Delivery . . . . . . .

---------------------
(1) If the amount enclosed or transmitted is not sufficient to
pay the Subscription Price for all shares that are stated to be
subscribed for, or if the number of shares being subscribed for is
not specified, the number of shares subscribed for will be assumed
to be the maximum number that could be subscribed for upon payment
of such amount. If the number of shares to be subscribed for
pursuant to the Oversubscription Privilege is not specified and the
amount enclosed or transmitted exceeds the Subscription Price for
all shares represented by this Subscription Certificate (the
"Subscription Excess"), the person subscribing pursuant hereto shall
be deemed to have exercised the Oversubscription Privilege to
purchase, to the extent available, that number of whole shares of
Common Stock equal to the quotient obtained by dividing the
Subscription Excess by $_____. Any amount remaining after such
division shall be returned to the subscriber.

FORM 2--TO TRANSFER YOUR SUBSCRIPTION CERTIFICATE OR SOME OR ALL OF
YOUR RIGHTS OR TO EXERCISE OR SELL RIGHTS THROUGH YOUR BANK OR BROKER: For
value received, ______ Rights represented by this Subscription Certificate
are hereby assigned to (please print name and address and Social Security
No. of transferee in full):

Name . . . . . . . . . . . . . . .
Address . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Social Security Number

--
/ /
-- FORM 3--CHECK HERE TO SELL YOUR UNEXERCISED RIGHTS THROUGH THE
SUBSCRIPTION/INFORMATION AGENT: Check box if the undersigned hereby
authorizes the Subscription/Information Agent to sell any Rights
represented by this Subscription Certificate but not exercised hereby and
to deliver to the undersigned a check for the net proceeds.

FORM 4--DELIVERY INSTRUCTIONS: Name and/or address for mailing any stock
certificates, new Subscription Certificate or cash payment if other than
shown on the reverse hereof:

Name . . . . . . . . . . . . . . .
Address . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
(Including Zip Code)

IMPORTANT
RIGHTS HOLDER SIGN HERE
AND, IF RIGHTS ARE BEING SOLD OR EXERCISED,
COMPLETE SUBSTITUTE FORM W-9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Signature(s) of Holder(s))

Dated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , 1994

(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
this Subscription Certificate. If signature is by trustee(s), executor(s),
administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of
a corporation or another acting in a fiduciary or representative capacity,
please provide the following information. See Instructions.)

Name(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Please Print)

Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Including Zip Code)

Area Code and
Telephone Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Home)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Business)
Tax Identification or
Social Security No. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Complete Substitute Form W-9)

GUARANTEE OF SIGNATURE(S)
Note: See Section 5(c) of Instructions

Authorized Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Name of Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Area Code and Telephone Number . . . . . . . . . . . . . . . . . . . . . . .
Dated: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , 1994

EXHIBIT 99(b)

INSTRUCTIONS AS TO USE OF C-TEC CORPORATION
SUBSCRIPTION CERTIFICATES
--------------------

CONSULT THE SUBSCRIPTION/INFORMATION AGENT, YOUR BANK
OR BROKER AS TO ANY QUESTIONS

The following instructions relate to a rights offering (the
"Rights Offering") by C-TEC Corporation, a Pennsylvania corporation (the
"Company"), to the holders of record of its Common Stock, par value $1.00
per share (the "Common Stock"), and to holders of record of its Class B
Common Stock, par value $1.00 per share (the "Class B Stock", and
collectively with the Common Stock, the "Company Stock"), as described in
the Company's Prospectus dated ____, 1994 (the "Prospectus"). Holders of
record of Company Stock at the close of business on ____, 1994 (the "Record
Date") are receiving [ ] transferable subscription rights (the "Rights")
for every [ ] shares of Company Stock held by them on the Record Date. An
aggregate of approximately [ ] Rights exercisable to purchase an aggregate
of approximately [ ] shares of Common Stock (the "Underlying Shares") are
being distributed in connection with the Rights Offering. Each Right is
exercisable, upon payment of $____ in cash (the "Subscription Price"), to
purchase one share of Common Stock (the "Basic Subscription Privilege").
In addition, subject to the allocation described below, each Right also
carries the right to subscribe at the Subscription Price for additional
shares of Common Stock available as a result of unexercised Rights, if any
(the "Oversubscription Privilege") up to the amount offered by the
Prospectus. Any Rights holder subscribing for an aggregate of more than
5000 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 5000 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
Right Offering have been effected. Underlying Shares will be available for
purchase pursuant to the Oversubscription Privilege only to the extent that
all the Underlying Shares are not subscribed for through the exercise of
the Basic Subscription Privilege by the Expiration Date. If the Underlying
Shares so available (the "Excess Shares") are not sufficient to satisfy all
subscriptions pursuant to the Oversubscription Privilege, the available
Excess Shares will be allocated pro rata (subject to the elimination of
fractional shares) among the holders of Rights who exercise 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 has purchased pursuant to the Basic
Subscription Privilege; provided, however, that if such pro rata allocation
results in any 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. See "The Rights Offering-Subscription
Privileges" in the Prospectus.

No fractional Rights or cash in lieu thereof will be issued or
paid. The number of Rights distributed by the Company has been rounded up
to the nearest whole number in order to avoid issuing fractional Rights.

The Rights will expire at 5:00 p.m., New York City time, on the
Expiration Date. The Rights are expected to be quoted on the NASDAQ
National Market ("NASDAQ").

The number of Rights to which you are entitled is printed on the
face of your subscription certificate. You should indicate your wishes
with regard to the exercise or sale of your Rights by completing the
appropriate form or forms on your subscription certificate and returning
the certificate to the Subscription/Information Agent in the envelope
provided.

YOUR SUBSCRIPTION CERTIFICATES MUST BE RECEIVED BY THE
SUBSCRIPTION/INFORMATION AGENT, OR GUARANTEED DELIVERY REQUIREMENTS WITH
RESPECT TO YOUR SUBSCRIPTION CERTIFICATES MUST BE COMPLIED WITH, AND
PAYMENT OF THE SUBSCRIPTION PRICE, INCLUDING FINAL CLEARANCE OF ANY CHECKS,
MUST BE RECEIVED BY THE SUBSCRIPTION/INFORMATION AGENT, ON OR BEFORE 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. ONCE A HOLDER OF RIGHTS
HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE AND/OR THE OVERSUBSCRIPTION
PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED.

1. Subscription Privilege.

To exercise Rights, complete Form 1 and send your properly
completed and executed subscription certificate, together with payments in
full of the Subscription Price for each Underlying Share subscribed for
pursuant to the Basic Subscription Privilege and the Oversubscription
Privilege, to the Subscription/Information Agent. Any Rights holder
subscribing for an aggregate of more than 5000 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 5000 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 made in U.S. dollars (a) by check or bank draft drawn upon
a U.S. bank or postal, telegraphic or express money order payable to [ ],
as Subscription/Information Agent, or (b) by wire transfer of funds to the
account maintained by the Subscription/Information Agent for such purpose
at [ ], [ ] (referenced: "C-TEC Corporation Subscription"). Payments will
be deemed to have been received by the Subscription/Information Agent only
upon (i) the clearance of any uncertified check, (ii) the receipt by the
Subscription/Information Agent of any certified check or bank draft drawn
upon a U.S. bank or any postal, telegraphic or express money order or (iii)
the receipt of good funds in the Subscription/Information 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. You
may also transfer your subscription certificate to your bank or broker in
accordance with the procedures specified in Section 3(a) below, make
arrangements for the delivery of funds on your behalf and request such bank
or broker to exercise the subscription certificate on your behalf.
Alternatively, you may cause a written guarantee substantially in the form
of Exhibit A to these instructions (the "Notice of Guaranteed Delivery")
from a member firm of a registered national securities exchange or a member
of the National Association of Securities Dealers, Inc., or from a
commercial bank or trust company having an office or correspondent in the
United States (each of the foregoing being an "Eligible Institution"), to
be received by the Subscription/Information Agent at or prior to the
Expiration Date together with payment in full of the applicable
Subscription Price. Such Notice of Guaranteed Delivery must state your
name, the number of Rights represented by your subscription certificate and
the number of Rights being exercised pursuant to the Basic Subscription
Privilege and the number of Underlying Shares, if any, being subscribed for
pursuant to the Oversubscription Privilege, and will guarantee the delivery
to the Subscription/Information Agent of your properly completed and
executed subscription certificates within five NASDAQ trading days
following the date of the Notice of Guaranteed Delivery. If this procedure
is followed, your subscription certificates must be received by the
Subscription/Information Agent within five NASDAQ trading days of the
Notice of Guaranteed Delivery. Additional copies of the Notice of
Guaranteed Delivery may be obtained upon request from the
Subscription/Information Agent at the address, or by calling the telephone
number, indicated below.

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/Information Agent and the Company (by delivery to the
Subscription/Information Agent of a Nominee Holder Certification
substantially in the form available from the Subscription/Information
Agent), 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 (including
such nominee itself) on whose behalf such nominee holder is acting. In the
event a Nominee Holder Certification is not delivered in respect of a
Subscription Certificate that includes the name of a soliciting dealer, the
Subscription Agent shall, for purposes of calculating the applicable
soliciting fee, be entitled to assume that such certificate is exercised on
behalf of a single beneficial owner. If more Excess Shares are subscribed
for pursuant to the Oversubscription Privilege than are available for sale,
Excess Shares will be allocated, as described above, among beneficial
owners exercising the Oversubscription Privilege in proportion to such
owners' exercise of Rights pursuant to the Basic Subscription Privilege.

The address and telecopier numbers of the Subscription/Information
Agent are as follows:

If by Mail: If By Hand:
[to come] [to come]

If by Overnight Courier:
[to come]

Telecopier: ( ) - or ( ) -

If you exercise less than all of the Rights evidenced by your
subscription certificate by so indicating in Form 1 of your subscription
certificate, the Subscription/Information Agent either (i) will issue to
you a new subscription certificate evidencing the unexercised Rights, (ii)
if you so indicate in Form 2 of your subscription certificate, will
transfer the unexercised Rights in accordance with your instructions or
(iii) if you so indicate in Form 3 of your subscription certificate, will
endeavor to sell such unexercised Rights for you. However, if you choose
to have a new subscription certificate sent to you or to a transferee, you
or such transferee may not receive any such new subscription certificate in
sufficient time to permit sale or exercise of the Rights evidenced thereby.
If you have not indicated the number of Rights being exercised, or if the
amount you have forwarded is not sufficient (subject to the second sentence
of Section 1 above) to purchase the number of shares subscribed for, you
will be deemed to have exercised the Basic Subscription Privilege with
respect to the maximum number of whole Rights which may be exercised for
the Subscription Price payment delivered by you, and to the extent that the
Subscription Price payment delivered by you exceeds the product of the
Subscription Price multiplied by the number of Rights evidenced by the
subscription certificates delivered by you (such excess being the
"Subscription Excess"), you will be deemed to have exercised your
Oversubscription Privilege to purchase, to the extent available, that
number of whole shares of Common Stock equal to the quotient obtained by
dividing the Subscription Excess by the Subscription Price.

2. Delivery of Stock Certificates, Etc.

The following deliveries and payments will be made to the address
shown on the face of your subscription certificate unless you provide
instructions to the contrary in Form 4.

(a) Basic Subscription Privilege. As soon as practicable after
the valid exercise of Rights, the Subscription/Information Agent will mail
to each exercising Rights holder certificates representing shares of Common
Stock purchased pursuant to the Basic Subscription Privilege.

(b) Oversubscription Privilege. 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, the
Subscription/Information Agent will mail to each Rights holder who validly
exercises the Oversubscription Privilege the number of shares allocated to
such Rights holder pursuant to the Oversubscription Privilege. See "The
Rights Offering-Subscription Privileges-Oversubscription Privilege" in the
Prospectus.

(c) Cash Payments. 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, the Subscription/Information Agent
will mail to each Rights holder who exercises the Oversubscription
Privilege any excess funds received in payment of the Exercise Price for
Excess Shares that are subscribed for by such Rights holder but not
allocated to such Rights holder pursuant to the Oversubscription Privilege.

Promptly following any sale of the Rights through the
Subscription/Information Agent, the Subscription/Information Agent will
mail to the holder of such Rights a check for any Rights sold, less
applicable commissions, taxes and other charges.

3. To Sell or Transfer Rights.

(a) Sale of Rights Through a Bank or Broker. To sell all Rights
evidenced by a subscription certificate through your bank or broker, so
indicate in Form 2 and deliver your properly completed and executed
subscription certificate to your bank or broker. If Form 2 is completed
without designating a transferee, the Subscription/Information Agent may
thereafter treat the bearer of the subscription certificate as the absolute
owner of all of the Rights evidenced by such subscription certificate for
all purposes, and the Subscription/Information Agent shall not be affected
by any notice to the contrary. Because your bank or broker cannot issue
subscription certificates, if you wish to sell less than all of the Rights
evidenced by a subscription certificate, either you or your bank or broker
must instruct the Subscription/Information Agent as to the action to be
taken with respect to the Rights not sold, or you or your bank or broker
must first have your subscription certificate divided into subscription
certificates of appropriate denominations by following the instructions in
Section 4 of these instructions. The subscription certificates evidencing
the number of Rights you intend to sell can then be transferred by your
bank or broker in accordance with the instructions in this Section 3(a).

(b) Transfer of Rights to a Designated Transferee. To transfer
all of your Rights to a transferee other than a bank or broker, you must
complete Form 2 in its entirety, execute the subscription certificate and
have your signature guaranteed by an Eligible Institution. A subscription
certificate that has been properly transferred in its entirety may be
exercised by a new holder without having a new subscription certificate
issued. In order to exercise, or otherwise take action with respect to,
such a transferred subscription certificate, the new holder should deliver
the subscription certificate, together with payment of the applicable
Subscription Price (with respect to the exercise of both the Basic
Subscription Privilege and the Oversubscription Privilege) and complete
separate instructions signed by the new holder, to the
Subscription/Information Agent in ample time to permit the
Subscription/Information Agent to take the desired action. Because only
the Subscription/Information Agent can issue subscription certificates, if
you wish to transfer less than all of the Rights evidenced by your
subscription certificate to a designated transferee, you must instruct the
Subscription/Information Agent as to the action to be taken with respect to
the Rights not sold or transferred, or you must divide your subscription
certificate into subscription certificates of appropriate smaller
denominations by following the instructions in Section 4 below. The
subscription certificate evidencing the number of Rights you intend to
transfer can then be transferred by following the instructions in this
Section 3(b).

(c) Sale of Rights Through Subscription/Information Agent. To
sell some or all of your Rights through the Subscription/Information Agent,
you must check the box in Form 3 and deliver the subscription certificate
to the Subscription/Information Agent. Your subscription certificate
should be delivered to the Subscription/Information Agent in ample time for
it to be sold and exercised, but in no event later than 11:00 a.m., New
York City time, on [ ], 1994. The Subscription/Information Agent's
obligation to execute orders is subject to its ability to find buyers. If
you wish to sell less than all of your Rights, you or your bank or broker
must instruct the Subscription/Information Agent as to the action to be
taken with respect to the Rights not sold. Promptly following any sale of
your Rights through the Subscription/Information Agent, the
Subscription/Information Agent will send you a check for the net proceeds
of such sale as described in the Prospectus. If you wish to sell Rights
through the Subscription/Information Agent, you should also complete the
Substitute Form W-9 referred to in Section 8 below.

4. To Have a Subscription Certificate Divided into Smaller Denominations.

To have a subscription certificate divided into smaller
denominations, send your subscription certificate, together with complete
separate instructions (including specification of the denominations into
which you wish your Rights to be divided) signed by you, to the
Subscription/Information Agent, allowing a sufficient amount of time for
new subscription certificates to be issued and returned so that they can be
used prior to the Expiration Date. Alternatively, you may ask a bank or
broker to effect such actions on your behalf. Your signature must be
guaranteed by an Eligible Institution if any of the new subscription
certificates are to be issued in a name other than that in which the old
subscription certificate was issued. Subscription certificates may not be
divided into fractional Rights, and any instruction to do so will be
rejected. As a result of delays in the mail, the time of the transmittal,
the necessary proceeding time and other factors, you or your transferee may
not receive such new subscription certificates in time to enable the Rights
holder to complete a sale or exercise by the Expiration Date. Neither the
Company nor the Subscription/Information Agent will be liable to either a
transferor or transferee for any such delays.

5. Execution.

(a) Execution by Registered Holder. The signature on the
subscription certificate must correspond with the name of the registered
holder exactly as it appears on the face of the subscription certificate
without any alteration or change whatsoever. Persons who sign the
subscription certificate in a representative or other fiduciary capacity
must indicate their capacity when signing and, unless waived by the
Subscription/Information Agent is its sole and absolute discretion, must
present to the Subscription/Information Agent satisfactory evidence of
their authority to so act.

(b) Execution by Person Other than Registered Holder. If the
subscription certificate is executed by a person other than the holder
named on the face of the subscription certificate, proper evidence of
authority of the person executing the subscription certificate must
accompany the same unless, for good cause, the Subscription/Information
Agent dispenses with proof of authority.

(c) Signature Guarantees. Your signature must be guaranteed by
an Eligible Institution if you wish to transfer your Rights, as specified
in Section 3(b) above, to a transferee other than a bank or broker, if you
wish a new subscription certificate or certificates to be issued in a name
other than that in which the old subscription certificate was issued, as
specified in Section 3 above, or if you specify special payment or delivery
instructions pursuant to Form 4.

6. Method of Delivery.

The method of delivery of subscription certificates and payment
of the Exercise Price to the Subscription/Information Agent will be at the
election and risk of the Rights holder, but, if sent by mail, it is
recommended that they 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/Information Agent and the clearance
of any checks sent in payment of the Exercise Price prior to 5:00 p.m., New
York City time, on the Expiration Date.

7. Special Provisions Relating to the Delivery of Rights
Through The Depository Trust Company.

In the case of holders of Rights that are held of record through
The Depository Trust Company ("DTC"), exercises of the Basic Subscription
Privilege (but not the Oversubscription Privilege) may be effected by
instructing DTC to transfer Rights (such Rights being "DTC Exercised
Rights") from the DTC account of such holder to the DTC account of the
Subscription/Information Agent, together with payment of the Subscription
Price for each Underlying Share subscribed for pursuant to the Basic
Subscription Privilege. The Oversubscription Privilege in respect of DTC
Exercised Rights may not be exercised through DTC. The holder of a DTC
Exercised Right may exercise the Oversubscription Privilege in respect of
such DTC Exercised Right by properly executing and delivering to the
Subscription/Information Agent at or prior to 5:00 p.m., New York City
time, on the Expiration Date, a DTC Participant Oversubscription Exercise
Form, in the form available from the Subscription/Information Agent, or a
Notice of Guaranteed Delivery, together with payment of the appropriate
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 5000 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 5000 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.

If a Notice of Guaranteed Delivery relates to Rights with respect
to which exercise of the Basic Subscription Privilege will be made through
DTC and such Notice of Guaranteed Delivery also relates to the exercise of
the Oversubscription Privilege, a DTC Participant Oversubscription Exercise
Form must also be received by the Subscription/Information Agent in respect
of such exercise of the Oversubscription Privilege within five NASDAQ
trading days of the Notice of Guaranteed Delivery.

8. Substitute Form W-9.

Each Rights holder who elects either to exercise Rights or to
have the Subscription/Information Agent endeavor to sell such holder's
Rights should provide the Subscription/Information Agent with a correct
Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is
included as Exhibit B hereto. Additional copies of Substitute Form W-9 may
be obtained upon request from the Subscription/Information Agent at the
address, or by calling the telephone number, indicated above. Failure to
provide the information on the form may subject such holder to a $50.00
penalty and to 31% federal income tax withholding with respect to (i)
dividends that may be paid by the Company on shares of Common Stock
purchased upon the exercise of Rights (for those holders exercising Rights)
or (ii) funds to be remitted to Rights holders in respect of Rights sold by
the Subscription/Information Agent (for those holders electing to have the
Subscription/Information Agent sell their Rights).

EXHIBIT A

NOTICE OF GUARANTEED DELIVERY

for

SUBSCRIPTION CERTIFICATIONS

issued by

C-TEC CORPORATION

This form, or one substantially equivalent hereto, must be used
to exercise Rights pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege pursuant to the Rights Offering described in the
Prospectus dated _____, 1994 (the "Prospectus") of C-TEC Corporation, a
Pennsylvania corporation (the "Company"), if a holder of Rights cannot
deliver the subscription certificate(s) evidencing the Rights (the
"Subscription Certificate(s)"), to the Subscription/Information Agent
listed below (the "Subscription/Information Agent") at or prior to 5:00
p.m. New York City time on _____, 1994 (the "Expiration Date"). Such form
must be delivered by hand or sent by facsimile transmission or mail to the
Subscription/Information Agent, and must be received by the
Subscription/Information Agent on or prior to the Expiration Date. See
"The Rights Offering-Exercise of Rights" in the Prospectus. Payment of the
Subscription Price of $_____ per share for each share of the Company's
Common Stock subscribed for upon exercise of such Rights must be received
by the Subscription/Information Agent in the manner specified in the
Prospectus at or prior to 5:00 p.m. New York City time on the Expiration
Date even if the Subscription Certificate evidencing such Rights is being
delivered pursuant to the procedure for guaranteed delivery thereof.

The Subscription/Information Agent is:
[ ]

By Mail: Facsimile Transmission: By Hand:
[ ] [ ] [ ]
Attention:[ ] [ ] Attention:[ ]
[ ] [ ]
[ ] [ ]
[ ]

if by Overnight Courier:
[ ]
Attention: [ ]
[ ]
[ ]

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.

Gentlemen:

The undersigned hereby represents that he or she is the holder of
Subscription Certificate(s) representing______ Rights and that such
Subscription Certificate(s) cannot be delivered to the Subscription Agent
at or before 5:00 p.m., New York City time on the Expiration Date. Upon
the terms and subject to the condition set forth in the Prospectus, receipt
of which is hereby acknowledged, the undersigned hereby elects to exercise
(i) the Basic Subscription Privilege to subscribe for one share of Common
Stock per Right with respect to each of _____ Rights represented by such
Subscription Certificate and (ii) the Oversubscription Privilege relating
to each such Right, to the extent that Excess Shares (as defined in the
Prospectus) are available therefor, for an aggregate of up to _____ Excess
Shares. The undersigned understands that payment of the Subscription Price
of $___ per share for each Common Share subscribed for pursuant to the Basic
Subscription Privilege and Oversubscription Privilege must be received by
the Subscription/Information Agent at or before 5:00 p.m., New York City
time, on the Expiration Date and represents that such payment, in the
aggregate amount of $ _____, either (check appropriate box):

/_/ is delivered herewith
or
/_/ was delivered separately;

in the manner set forth below (check appropriate box and complete
information relating thereto):

/_/ wire transfer of funds

- name of transferor institution

- date of transfer

- confirmation number (if available)

/_/ uncertified check (Payment by uncertified check will not be deemed
to have been received by the Subscription/Information Agent until such
check has cleared. Holders paying by such means are urged to make payment
sufficiently in advance of the Expiration Date to ensure that such payment
clears by such date.)

/_/ certified check

/_/ bank draft (cashier's check)

/_/ money order

- name of maker

- date and number of check, draft or money order number
(date) (number)

- bank on which check is drawn or issuer of money order

Signature(s) Address

Name(s)
Area Code and Tel. No(s).
Please Type or Print

Subscription Certificate
No(s). (if available)

GUARANTEE OF DELIVERY
(Not to be used for Subscription Certificate signature guarantee)

The undersigned, a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc. or a commercial bank or trust company having an office or
correspondent in the United States, guarantees that the undersigned will
deliver to the Subscription/Information Agent the certificates representing
the Rights being exercised hereby, with any required signature guarantees
and any other required documents, all within five NASDAQ trading days after
the date hereof.

Dated: , 1994

(Name of Firm)
(Address)

(Area Code and Telephone Number) (Authorized Signature)

The institution which completes this form must communicate the
guarantee to the Subscription/Information Agent and must deliver the
Subscription Certificate(s) to the Subscription/Information Agent within
the time period shown herein. Failure to do so could result in a financial
loss to such institution.

EXHIBIT B

IMPORTANT TAX INFORMATION

Under the federal income tax law, (i) dividend payments that may be
made by the Company on shares of Common Stock issued upon the exercise of
Rights, and (ii) payments that may be remitted by the
Subscription/Information Agent to Rights holders in respect of Rights sold
on such holders' behalf by the Subscription/Information Agent, may be
subject to backup withholding. Generally, such payments will be subject to
backup withholding unless (i) the holder is exempt from backup withholding
or (ii) the holder, in the case of backup withholding of payments remitted
in respect to rights sold, furnishes the payor with his correct tax
identification number and certifies that the number provided is correct
and, in the case of backup withholding on dividend payments, the holder
further certifies that such holder is not subject to backup withholding due
to prior underreporting of interest or dividend income. Each Rights holder
who either exercises Rights or requests the Subscription/Information Agent
to sell Rights and wishes to avoid backup withholding should provide the
Subscription/Information Agent (as the Company's agent, in respect of
exercised Rights, and as payer with respect to Rights sold by the
Subscription/Information Agent) with such Rights holder's correct taxpayer
identification number (or with a certification that such Rights holder is
awaiting a taxpayer identification number) and with a certification that
such Rights holder is not subject to backup withholding by completing
Substitute Form W-9 below.

Exempt Rights holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding
and reporting requirements. In general, in order for a foreign individual
to qualify as an exempt recipient, the Rights holder must submit a
statement, signed under the penalties of perjury, attesting to that
individual's exempt status. Such statements can be obtained from the
Subscription/Information Agent. Exempt Rights holders, while not required
to file, should file Substitute Form W-9 to avoid possible erroneous backup
withholding. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.

If backup withholding applies, the Company or the
Subscription/Information Agent, as the case may be, will be required to
withhold 31 percent of any such payments made to the Rights holder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may
be obtained.

Purpose of Substitute Form W-9

To prevent backup withholding on payments remitted by the
Subscription/Information Agent with respect to Rights sold, the Rights
holder is required to notify the Subscription/Information Agent of his
correct taxpayer identification number by completing the form below
certifying that the taxpayer identification number provided on Substitute
Form W-9 is correct (or that such Rights holder is awaiting a taxpayer
identification number). To prevent backup withholding on dividend
payments, the Rights holder must, in addition, certify on Substitute Form
W-9 that he is not subject to backup withholding due to prior
underreporting of interest or dividend income.

What Number to Give the Subscription/Information Agent

The Rights holder is required to give the Subscription/Information
Agent the taxpayer identification number of the record owner of the Rights.
If such record owner is an individual, the taxpayer identification number
is his social security number. If the Rights are in more than one name or
are not in the name of the actual owner, consult the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9
for additional guidelines on which number to report. If the
Subscription/Information Agent is not provided with the correct taxpayer
identification number in connection with such payments, the Rights holder
may be subject to a $50 penalty imposed by the Internal Revenue Service.

PAYER'S NAME: [ ]

GUIDELINES FOR CERTIFICATE OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) List first and circle the name of the legal trust, estate or pension
trust.
(4) Show the name of the owner.
Note: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.

Obtaining a Number

If you don't have a taxpayer identification number or you don't know
your number, obtain Form SS-5, Application for a Social Security Number
Card, or Form SS-4, Application for Employer Identification Number, at the
local office of the Social Security Administration or the Internal Revenue
Service and apply for a number.

Payees Exempt from Backup Withholding

Payees specifically exempted from backup withholding on ALL payments
include the following:

bullet A corporation.
bullet A financial institution.
bullet An organization exempt from tax under section 501(a), or an
individual retirement plan, or a custodial account under section
403(b)(7).
bullet The United States or any agency or instrumentality thereof.
bullet A State, the District of Columbia, a possession of the United
States, or any subdivision or instrumentality thereof.
bullet A foreign government, a political subdivision of a foreign
government, or any agency or instrumentality thereof.
bullet An international organization or any agency or instrumentality thereof.
bullet A dealer in securities or commodities registered in the
United States or a possession of the United States.
bullet A real estate investment trust.
bullet A common trust fund operated by a bank under section 584(a).
bullet An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1).
bullet An entity registered at all times under the Investment Company Act
of 1940.
bullet A foreign central bank of issue.

Payment of dividends and patronage dividends not generally subject to
backup withholding include the following:

bullet Payments to nonresident aliens subject to withholding under section
1441.
bullet Payments to partnerships not engaged in a trade or business in
the United States and which have at least one nonresident partner.
bullet Payments of patronage dividends where the amount received is not
paid in money.
bullet Payments made by certain foreign organizations.
bullet Payments made to a nominee.

Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.

Payments that are not subject to information reporting are also not
subject to backup withholding. For details, see the regulations under
sections 6041, 6041(A)(a), 6042, 6044, 6045, 6049, 6050(A) and 6050(N).

Privacy Act Notice

Section 6109 requires most recipients of dividends, interest, or other
payments to give taxpayer identification numbers to payers who must report
the payments to IRS. The IRS uses the numbers for identification purposes
and to help verify the accuracy of your tax return. Payers must be given
the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividends, and
certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.

Penalties

(1) Penalty for Failure to Furnish Taxpayer Identification Number.
If you fail to furnish your taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure
is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information With Respect to Withholding.
If you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $5000.

(3) Criminal Penalty for Falsifying Information. Falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX CONSULTANT
OR THE INTERNAL REVENUE SERVICE.

EXHIBIT 99(c)

NOTICE OF GUARANTEED DELIVERY

for

SUBSCRIPTION CERTIFICATIONS

issued by

C-TEC CORPORATION

The Subscription/Information Agent is:
[ ]

By Mail: Facsimile Transmission: By Hand:
[ ] [ ] [ ]
Attention:[ ] [ ] Attention:[ ]
[ ] [ ]
[ ] [ ]
[ ]

if by Overnight Courier:
[ ]
Attention: [ ]
[ ]
[ ]

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.

Gentlemen:

/_/ is delivered herewith
or
/_/ was delivered separately;

in the manner set forth below (check appropriate box and complete
information relating thereto):

/_/ wire transfer of funds

- name of transferor institution

- date of transfer

- confirmation number (if available)

/_/ certified check

/_/ bank draft (cashier's check)

/_/ money order

- name of maker

- date and number of check, draft or money order number
(date) (number)

- bank on which check is drawn or issuer of money order

Signature(s) Address

Name(s)
Area Code and Tel. No(s).
Please Type or Print

Subscription Certificate
No(s). (if available)

GUARANTEE OF DELIVERY
(Not to be used for Subscription Certificate signature guarantee)

Dated: , 1994

(Name of Firm)
(Address)

(Area Code and Telephone Number) (Authorized Signature)