I like this...
In a statement, Michael Armstrong, AT&T chairman and chief executive, said the
merger "will mean a real choice and lower prices in local phone service, faster
Internet access and better cable TV. For consumers, that's a home run in any
ballpark."
AT&T's Cicconi said the companies hope to close the deal soon, but by Aug. 3
at the latest.
The May 2001 deadline appears to allow AT&T to divest Liberty Media without
tax consequences. The company acquired Liberty with its acquisition of
Tele-Communications Inc. in March 1999, and sale before two years would have
been considered a liquidation, subject to heavy penalties from the Internal
Revenue Service.
However, two years is simply the minimum time required, and not a guarantee
against tax liabilities, according to Scott Cleland, telecommunications analyst
with the Legg Mason Precursor Group. Indeed, the FCC's flexibility could come
back to haunt AT&T.
"The IRS has to rule that divestiture was forced by government," Cleland said.
"If the government is not explicit, the sale may or may not comply" with IRS
rules.
The Justice Department signed off on the deal in late May after AT&T agreed to
sell MediaOne's stake in RoadRunner, a company that provides high-speed Internet
access over cable. AT&T has a stake in another such service, Excite@Home (ATHM),
which, combined with Road Runner, would have given AT&T control over the largest
cable broadband providers.
Prior to divestiture, AT&T faces interim conditions meant to isolate
programming interests from the Time-Warner Entertainment cable systems. Failure
to comply could result in fines of up to $100,000 for the first failure, and
$250,000 for additional failures, with additional penalties of up to $10,000 per
day and up to $100,000 per day after five days of failing to resolve the issue.
-Mark Wigfield, Dow Jones Newswires; 202-828-3397; mark.wigfield@dowjones.com
(END) DOW JONES NEWS 06-05-00
05:44 PM |
