Impact on HLIT?
news.cnet.com
AT&T offers to divest cable Internet service
By Reuters
Special to CNET News.com
March 9, 2000, 11:30 a.m. PT
WASHINGTON--AT&T, bidding to become the largest cable-TV operator with its
proposed purchase of MediaOne Group, is offering to divest a cable Internet service to
appease federal antitrust regulators, people familiar with the deal said.
AT&T, by virtue of its completed acquisition of Tele-Communications, owns a large stake in
high-speed cable Internet provider Excite@Home. MediaOne is a joint owner with Time Warner
in the similar Road Runner service.
The potential combined ownership of stakes in the only two significant
high-speed cable Internet services has been a stumbling block with antitrust
regulators at the Department of Justice.
After resisting a divestiture for some time, the companies are now
willing to shed one of the stakes, people familiar with the deal said
yesterday. They did not specify which service would be divested.
AT&T, MediaOne and Excite@Home declined to comment.
Such a move would likely speed Justice Department approval, but
would have little effect on the Federal Communications
Commission's separate and independent review that has focused
on other issues.
The issue has become increasingly convoluted following America
Online's proposed acquisition of Time Warner. Road Runner has an
exclusive contract with Time Warner and MediaOne requiring that
their customers use its Internet service, but
AOL has said it will seek to end the exclusivity as soon as possible.
A spokeswoman for the Justice Department said only that the agency's
antitrust review continues.
At the end of 1999, Excite@Home had about 1.15 million subscribers to its high-speed Internet
service that reaches cable customers of AT&T, Cox Communications and Comcast. AT&T
owns 26 percent of Excite@Home but a 58 percent voting stake. Comcast and Cox have the
ability to veto major decisions, however.
Road Runner, which is not publicly traded, has about 550,000 subscribers in cable systems
owned by Time Warner and MediaOne. |
