Top FCC Official Says Agency Should Revisit AT&T Conditions
By YOCHI J. DREAZEN
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- A top Federal Communications Commission official said the agency should revisit the strict conditions imposed on AT&T Corp.'s acquisition of MediaOne Group Inc. and suspend its deadline for the company to sell some cable assets.
FCC Commissioner Harold Furchgott-Roth said the agency shouldn't force AT&T to reduce its 42% share of the nation's cable-television market until the agency has had time to review a recent court decision striking down federal cable-ownership caps.
Court Overturns FCC's Ownership Caps, In Victory for AT&T, AOL, Cable Firms (March 5)
AT&T Takes Steps to Unload Stake in Time Warner Entertainment (Mar. 1)
Mr. Furchgott-Roth's remarks, which came just days after similar comments from FCC Chairman Michael Powell, suggest the GOP-controlled commission may be willing to adopt a softer approach toward AT&T, the nation's largest cable operator. AT&T has been trying to sell some cable assets to AOL Time Warner Inc. to comply with a pending FCC deadline, but the two companies have been unable to agree on a price. An FCC decision giving AT&T more time to sell the holdings would give the company a boost by allowing it to hold out for more money.
"It's impossible to ask a company to come into compliance with rules that the courts found unconstitutional," said Mr. Furchgott-Roth, who voted against the divestiture conditions last year. "I don't see how we can compel AT&T to comply with it," he said.
Two weeks ago, the U.S. Court of Appeals for the District of Columbia Circuit struck down FCC rules barring any one company from controlling more than 30% of the nation's total cable market. AT&T's purchase of MediaOne last year brought its share of the market to 42%, and the FCC, citing the federal ownership limits, ordered the company to sell some of its cable assets.
AT&T's first choice was to spin off Liberty Media Group, which has stakes in content providers such as USA Networks Inc., if it got a favorable tax ruling. The FCC preferred a more definitive solution and ordered the company to sell its 25.5% stake in Time Warner Entertainment, AT&T's joint venture with AOL Time Warner, by May 19.
The company has been trying to sell that stake back to AOL, but the two sides have been unable to agree on a price, and AT&T recently asked AOL to approve its sale in a public offering.
Postponing the FCC deadline would allow AT&T to negotiate from a position of relative strength, helping it hold out for more favorable terms.
FCC officials said the agency hasn't decided whether to appeal the decision to the Supreme Court. Last week, Mr. Powell said the agency would "review what our legal obligations are" in light of the appellate-court ruling.
A spokesman for AT&T, which has until March 20 to tell the FCC whether it can meet the May deadline, declined to comment on the matter. |
