ATHM is an independent company. T does not own them and does not control them. They potentially will own TCI which is the majority stock holder, so T would become the majority holder. It isn't enough to carry the board. GE owns NBC. Gulf & Western owns half the world. MSFT is trying to buy the other half. So what?
Control and ownership are different things. ATT Worldnet is owned and controlled by T. That net is copper. Though ATHM likes to smoke screen with their DSL arm, they are a cable ISP. Two different birds with two different markets, the high end and the low end. Eventually the low end will cease to exist. Copper belongs in chip interconnect lines not telephone interconnect lines. At least not in this era, however, the orchestrated sea of electrons and holes that copper conducts so well may yet make a comeback. That won't happen for a hundred years if at all.
T-TCI doesn't have a "contract". ATHM rents the cable line. I guess you could call it a rental contract, an agreement by which ATHM pays a percentage of the revenues to T-TCI received for the ISP service delivered for the use of the cable plant. To deny that agreement or prevent renewal would be absurd. There are the other cable MSOs who would ignore T's attempt to run telephony over their cables and would go to some other provider, say RBOC or CLEC. These alternatives would be happy to incorporate their telephony expertise on other cable plant. T would have to compete against two entrenched operators:ATHM and TWX. Why bother if you already are a beneficiary of ATHM's success without the cost of entry, the new build-out cost, and sheltered from risk by the MSO customer support. All T needs to do is add water, that is, add telephony, which isn't very difficult, to get a leveraged return without the development cost.
T is buying a presence. They may evolve a utilization of ATHM which isn't currently being anticipated by ATHM management. When T makes deals like this BT thing, you know that whatever they have in mind will be exceedingly constructive for ATHM. As I have mentioned in the past and maybe you will recall, ATHM will always come up smelling sweet. It's the kind of company Wall Street loves to hate. They never understand why it goes and it will always end up on top in spite of everything the MSOs, the government, their competitors, and their own management, do to to confound the realization of success. You almost have to own it so you won't get so upset for not owning something so "obvious". |
