AT&T's Armstrong on MediaOne Regulatory Issues: Company Comment
Los Angeles, May 5 (Bloomberg) -- AT&T Corp. Chief Executive C. Michael Armstrong speaks at the Los Angeles Town Hall luncheon on AT&T's proposed $62.5 billion purchase of MediaOne Group Inc. The acquisition would make AT&T, already the largest long- distance provider, also the largest cable-TV company as Armstrong moves to provide high-speed Internet, phone and cable services to homes.
''There's been a lot of speculation on the antitrust issue, and its important to educate those who don't love to follow our industry real closely. The regulation people are referring to was suspended four years ago. Congress asked the FCC for some limit on vertical integration because it was afraid that cable companies who owned content companies would stifle or block the distribution of content, so it set a threshold of 30 percent ownership. That was immediately challenged in court and overturned on a First Amendment basis, and has been in suspension for four year. The FCC is going to review that set of rules.''
''We really believe, with our investment in MediaOne, we have bracketed the provision that is in suspension and under review by the FCC because with owned and operated stations we have about 25 percent, and with affiliates we have about 35 percent. And if required to do equity swaps we'll get down to 30 percent. That's why I'm not concerned.''
''With our MediaOne proposal, AT&T is taking another step to bring services to even more American families. We offered to purchase MediaOne for $58 billion in stock and cash, and that's a lot of money, even for AT&T. But our proposed merger, just like the earlier acquisition of TCI, is not only an investment in AT&T's future but an investment in a competitive communications market across this country.''
''Ever since the Telecom Act was passed in 1996, people have been waiting for someone to run a second wire to their home and give them the kinds of choice the local phone service has enjoyed in long distance for years. The acquisition of MediaOne is all about doing that. Combining AT&T and MediaOne means far more American consumers will have a real choice in local phone service. Together, MediaOne and AT&T will bring voice, video and data services to more communities more quickly and more cost effectively than either one of us could have done alone, or any better than anybody else or any combination of anybody else.
slam dunk!
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