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To: riposte who wrote (1255)	12/2/1999 1:37:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 2347

December 01, 1999 17:20 Charter, AT&T unit to swap certain cable systems ST. LOUIS, Dec 1 (Reuters) - Cable systems operator Charter Communications Inc. said Wednesday it agreed to swap certain cable systems with a unit of AT&T Corp. as part of a plan to build regional cable "clusters" that are cheaper to operate. Charter, the fourth-largest cable company and brainchild of Microsoft Corp. co-founder Paul Allen, said the agreement with AT&T Broadband & Internet Services would create more efficient cable operations and speed the delivery of broadband services such as digital cable and high-speed Internet access to more customers. Financial terms were not disclosed. Charter plans to take over AT&T cable systems serving about 704,000 customers in the St. Louis area and additional communities in Missouri, Illinois, Alabama and Georgia. AT&T's broadband unit would take over certain Charter cable systems serving about 632,000 customers, and receive an undisclosed amount of cash. "Charter's strategy for growth from the beginning has been to geographically cluster our cable systems to gain operating efficiencies and economies of scale," Jerald Kent, president and chief executive officer of Charter, said in a statement. "Operating regional clusters -- like the 800,000-customer cluster we will serve in Missouri and Illinois, which includes some 500,000 customers in metro St. Louis -- helps us accelerate technology at even greater speeds," he said. "We are upgrading our cable infrastructure to offer customers digital cable television, high speed Internet and to build in the capacity for full broadband portal services." The proposed swap is subject to completion of definitive documentation and must receive regulatory approvals, which is expected to take several months. Until then, all properties included in the swap will continue operating under their current management, Charter said. Ahead of the news, shares in Charter Communications, which was priced at $19 when it went public in November, closed up 1-11/16 at 24-7/8. AT&T's shares ended down 1-1/8 at 54-3/4. <<<< cabledatacomnews.com

To: riposte who wrote (1255)	12/2/1999 1:48:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 2347

More on the Charter deal: Posted at 9:27 p.m. PST Wednesday, December 1, 1999 AT&T's cable blanket AT&T: If deal to buy South Bay franchises goes through, it would cover most of the Bay Area market. BY JON HEALEY Mercury News Staff Writer AT&T Corp. has a tentative deal to take over the South Bay cable TV franchises it doesn't already own, giving it near-blanket coverage of the Bay Area cable market. The exchange was part of a larger deal that would send about 704,000 AT&T customers to Charter Communications of St. Louis and about 632,000 Charter customers to AT&T. An estimated 50,000 of the Charter customers are in the South Bay, including those served by Charter-owned Falcon Cable. Anthony Eulo, environmental programs manager for Morgan Hill, said it was too early to tell how the change in ownership would affect consumers. The sale from Falcon to Charter was a clear improvement for local residents, he said, but ``this time the issue is much less clear.' That's because Charter, under pressure from local officials, already agreed to upgrade the antiquated networks it bought from Falcon and Sonic Cable in Morgan Hill, Gilroy, Hollister and Santa Cruz County. Those agreements, which would apply to AT&T if it took over those franchises, will yield networks that can deliver far more channels, provide better reception and connect users to the Internet at high speed. The main difference between AT&T and Charter is most likely to be in the products and services they offer through their upgraded cable networks. Charter's chief, Microsoft co-founder Paul Allen, is focused on the Internet and the kinds of services and entertainment a high-speed digital pipeline can deliver. AT&T bought cable TV systems primarily because they could be modified to deliver phone calls, although it expects to offer a complete package of communications and video services. If the swap goes through, along with the proposed buyout of the Palo Alto Cable Co-op, AT&T will be the cable operator in every Bay Area city save San Bruno and Santa Rosa. A handful of smaller operators will continue serving scattered homes in the region, mainly in hilly areas not reached by AT&T. Once AT&T has pervasive coverage in the Bay Area, it can market its services much more efficiently through TV and newspaper ads -- particularly after it develops a common channel lineup and prices. Such efficiencies are important once AT&T starts competing for local phone customers with Pacific Bell, which already has near-blanket coverage of the Bay Area. Hardly a monopoly But AT&T hardly has a monopoly on video service in the Bay Area. It faces new, stiffer competition from digital satellite service, which just got permission to beam local stations to their customers along with several hundred other channels. And within a few months, AT&T could also face competition from upstart cable companies, RCN Corp. on the Peninsula and Seren Innovations in parts of the East Bay. Charter took over Sonic's networks in Watsonville, Capitola and the unincorporated parts of Santa Cruz County in May 1998. When it approved the deal, the county Board of Supervisors required Charter to cut its rates and upgrade the networks within two years. Morgan Hill imposed the same deadline, Eulo said. Clayton Lee, director of management services for the City of Hollister, said officials there and in Gilroy are finalizing new franchise agreements that require state-of-the-art networks within two years. The upgrades will bring welcome relief to residents who have endured limited channel selection and poor picture quality. In Hollister, for example, the aging cable system provides only 35 channels. Charter would pay The tentative deal calls for Charter to pay an undisclosed amount as part of the swap. The deal would help Charter consolidate its holdings around St. Louis, among other cities, while AT&T would add to its extensive holdings in Texas and the Northeast. AT&T spokeswoman LaRae Marsik said it will take several months for the two sides to wrap up negotiations and gain regulatory approval for the deal.