AT&T, Comcast commit to choice of Internet
providers
29 Mar 2002, 5:56pm ET
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By Jeremy Pelofsky
WASHINGTON, March 29 (Reuters) - Comcast Corp. (NASDAQ:CMCSK) and
AT&T Broadband (NYSE:T), cable operators seeking federal approval to
combine, have committed to offer consumers a choice of high-speed
Internet service providers (ISPs) via cable lines, documents revealed on
Friday.
The two companies will negotiate commercial agreements with unaffiliated
ISPs to give consumers that choice, according to documents filed with
the Federal Communications Commission, which is reviewing whether to
approve Comcast's bid to acquire AT&T Broadband.
"AT&T Comcast is fully committed to negotiating mutually beneficial
service agreements with Internet service providers so that its cable
customers will have a choice of ISPs," the companies said.
"Each applicant is actively (and independently) negotiating to reach
commercial agreements with unaffiliated ISPs," they said. AT&T Broadband
recently inked such a deal with EarthLink Inc. (NASDAQ:ELNK), which also
offers service on Time Warner systems in certain markets.
The documents were made public on Friday as the agency seeks comment
on whether the deal is in the public interest. AT&T is already the biggest
U.S. cable provider and would grow to a company with more than 22
million customers.
Choice of Internet service providers has been a hot-button issue in the
cable industry as consumer groups and unaffiliated ISPs seek access to
the cable pipeline which can be used for high-speed Internet service.
As part of America Online's (NYSE:AOL) acquisition of cable giant Time
Warner in 2001, the companies were required by antitrust enforcers to
offer consumers a choice of Internet providers via their cable systems.
The FCC is already embroiled in an intense debate over what rules apply
to high-speed Internet service via cable lines. The agency recently
declared the service would be subject to few regulations, which is being
challenged by consumer groups and rival ISPs, including EarthLink.
Nonetheless, the FCC is weighing whether to require cable operators to
provide consumers a choice of ISPs.
The number of subscribers to high-speed Internet service via cable rose
more than 12 percent to 7.2 million in the fourth quarter of 2001 despite
the economic slowdown, according to a cable trade group.
In addition to offering customers such a choice, AT&T and Comcast
argued that their combination will speed the deployment of high-speed
Internet service as well as other new digital television and telephone
services without any downsides.
AT&T and Comcast said it will be able to upgrade cable systems more
quickly because of the economies of scale and scope as well as cost
savings from the merger.
The companies also said they would be able to speed the roll out of
telephone service via their cable systems, providing additional competition
in local telephone markets.
In addition to obtaining approval from the FCC, antitrust enforcers must
also sign off on the deal. Under its terms, Comcast will pay about $47
billion in stock, plus the assumption of about $20 billion in debt.
Copyright 2002, Reuters News Service |
