"AT&T Corp. told federal regulators and Wall Street on Friday that it will spend another $2 billion to speed the upgrade of Tele-Communications Inc.'s .....so they can deliver local telephone and Internet and more sophisticated TV services beginning later this year... The long-distance company, which wants to wrap up its TCI acquisition by June..."
AT&T speeds cable-phone plans
By Bob Diddlebock
Denver Post Business Writer
Jan. 9 - AT&T Corp. told federal regulators and Wall Street on Friday that it will spend another $2 billion this year to speed the upgrade of Tele-Communications Inc.'s cable systems, including its Denver operation, so they can deliver local telephone and Internet and more sophisticated TV services beginning later this year.
Those plans, which initially will target another nine U.S. cities, will accelerate AT&T's efforts to deliver so-called "bundled'' telecommunications services to most TCI subscribers by 2000, the company said in a proxy statement filed with the Securities and Exchange Commission and in conference calls with analysts.
In Denver, executives at TCI's corporate headquarters in Englewood and at TCI of Colorado, which serves 445,000 local cable subscribers, declined comment on AT&T's announcement.
AT&T and TCI stockholders will vote Feb. 17 on whether to approve the companies' $48 billion merger, which AT&T Chairman Michael Armstrong said Friday will "transform AT&T from a company dominated by a single product line - long-distance voice - into the leader in a new generation of advanced communications, information and video services.''
The long-distance company, which wants to wrap up its TCI acquisition by June, said it will test cable telephone service in Denver, Chicago, Dallas, Pittsburgh, Seattle, Salt Lake City, St. Louis, Portland, Ore., and two San Francisco Bay-area communities.
A major roadblock, however, is Portland, where the city council has refused to transfer TCI's 35,000-subscriber cable franchise to AT&T unless the companies open their network to competing Internet-access service providers. AT&T and TCI could face the same obstacle in Denver if the city council, which will address the franchise-transfer issue during a Jan. 19 meeting, follows Portland's lead.
On other fronts, AT&T said Friday it:
Expects its long-distance revenue to drop as much as 4 percent this year due to strong competition.
Will buy back as much as $4 billion of its stock in the open market to help fund the TCI purchase. AT&T's stock closed Friday at $85.06, up $2.81. TCI's Class A shares, which were trading in the $26 range last January, closed Friday at $62.25, up $1.19.
Won't immediately create a separate "tracking'' stock to reflect its cable TV and consumer phone business after the TCI purchase. That proposal had been part of the companies' initial merger agreement. Armstrong said AT&T will, instead, initially focus on merging its varied businesses.
Plans a 3-for-2 stock split after the TCI deal closes.
Will launch joint telephone ventures with five TCI affiliate companies serving a combined 4 million subscribers: Bresnan Communications, Falcon Cable TV, Insight Communications, InterMedia Partners and Peak Cablevision. AT&T said nothing about reported discussions with Time Warner Inc., the nation's largest cable company, about cutting a cable-telephony deal.
Will budget up to $12 billion this year for capital expenditures, including upgrading TCI's plant to carry telephone service and "increase video capacity.'' |
