From Bloomberg:
AOL, AT&T May Link for Access After Portland Ruling
New York, June 7 (Bloomberg) -- America Online Inc., the largest Internet service provider, and AT&T Corp., which is set to become the No. 1 U.S. cable-television company, may ally to provide high-speed access after a federal judge ruled AT&T must let rivals use its cable network in Oregon, analysts said.
Earlier this year, Portland-area officials approved the transfer of Tele-Communications Inc.'s cable-television franchise to AT&T on the condition that TCI's cable system be opened for use by outside Internet companies. TCI, which AT&T bought for $59.4 billion in March, and AT&T sued. AT&T agreed last month to acquire MediaOne Group Inc. for $62.5 billion.
AT&T is buying cable companies and upgrading their networks to offer local, long-distance, cable and Internet services over a single connection. AOL and other Internet companies want to use AT&T's upgraded cable lines to provide their high-speed data services.
''This gives AOL and ISPs some leverage in negotiating wholesale deals with AT&T,'' said Daniel Zito, an analyst with Legg Mason Wood Walker Inc. who rates AT&T ''outperform.'' ''If such an agreement can be struck, all of the wind goes out of the open access sail instantaneously.''
AOL already has teamed up with local phone companies Bell Atlantic Corp. and SBC Communications Inc. to provide high-speed Internet services. An agreement with New York-based AT&T would give AOL access to about 15.9 million cable customers, including those AT&T will acquire from MediaOne and those Comcast Corp. has an option to buy as a result of the AT&T-MediaOne agreement.
AT&T General Counsel James Cicconi said on the CNBC cable-TV network that the company is will to talk with AOL and any other Internet access provider about letting them use AT&T's cable network.
''We believe in open systems,'' Cicconi said. ''We're willing to negotiate with anybody in terms of carriage on those systems.''
Shares of AT&T shares fell 1/8 to 53 1/4. AOL fell 3 1/2 to 114 1/2.
Jun/07/1999 16:30
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