A B737-700 Captain reports about an unclear section of MEL 34-20 for deferral of the #1 Radar/Radio Altimeter that may; or may not; require MEL Chapter 27-13 Stall Warning System to be applied under MEL 34-20; if both Stall Warning Systems are operational.

Narrative

I am filing this in the interest of improving MEL language due to confusion in applying an MEL. I do not believe we made any errors; but the Dispatcher had some discomfort with the interpretation of MEL provisos that Maintenance Control and I agreed upon; and I concurred with the Dispatcher that it was somewhat confusing applying the subsequent MELS. MEL 34-20 was applied for an inoperable Captain's Radar Altimeter that occurred enroute. This resulted in a (Proximity Sensor Electronics Unit) PSEU light on landing for the inbound crew. A Company Mechanic jumpseating handled Maintenance Control and the MEL. [MEL] 34-20 for the B737-700 requires that the number one Radio Altimeter circuit breaker be collared; CAT I and 3/4 or 4;000 RVR restriction be applied; no use of the 'A' Autopilot and Autothrottle on approach; and no RNAV GPS/RNAV RNP (Required Navigation Performance) operations done; and references MEL 34-12 be applied under MEL 34-20. There is no problem there. Section 'F' next states that Maintenance test both Stall Warning Systems and that the aircraft may dispatch with one operative Stall Warning System (test passed) provided all provisos of MEL 27-13 Stall Warning Systems are applied. Both systems tested good (by the Mechanic and me) so Maintenance Control and I believed that this section was not applicable because as far as we could tell; we were going to dispatch with two operative systems and this section only applies if there is just one operative system. The Dispatcher believed that [MEL] 27-13 needed to be applied regardless as an underlying condition. He stated that this has been a conflict in the past and he needed resolution on this. He was very reluctant to dispatch the aircraft. Further discussions led to he and I agreeing that perhaps a company report by us and him could clarify this disagreement. For then; we agreed we would dispatch the aircraft under my and Maintenance Control's interpretation of [MEL] 27-13 being not applicable with both systems passing the test. We are both interested in understanding the reason and intent of Section 'F' and if it applies with both systems [Stall Warning] testing good (as was Dispatch's opinion) or not applying at all if both pass. New language is needed in this section. If both stall systems test good; then the section should clearly state that MEL 27-13 is not applicable if that is the intent. Or if it does apply even if they both test good; then it should be so stated. The remaining underlying MEL of 32-17 regarding a dispatchable PSEU fault was also applied. Revise the MEL language as discussed above.