FCC Orders AT&T to Sell Its TWE Stake
As Telecom Insists It Is Meeting Obligation
interactive.wsj.com
Excerpts:
AT&T last week told the FCC it planned to use its previously announced spinoff of Liberty, pending a favorable tax ruling from the Internal Revenue Service, to meet its obligation to the FCC. If a favorable tax ruling wasn't forthcoming, then AT&T said it would sell its stake in TWE, and place its stake in an irrevocable trust in order to sell it.
The qualified nature of AT&T's response didn't go over so well with the FCC, which this week asked for immediate clarification. Thursday night, regulators gave AT&T one month to tell the agency if its order is unwarranted.
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Meantime, AT&T's discussions with Time Warner on selling the TWE stake back to Time Warner appear to be making some progress. After months of fits and starts, the two companies "are making good progress," one person close to the situation said Thursday night.
Any deal likely wouldn't include an exchange of cash, which would trigger a hefty tax bill. Rather, AT&T and Time Warner are discussing a range of "creative" options, this person said. "There are lots of points of intersection" between the two companies, this person added.
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