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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (3304)	1/8/1998 3:00:00 PM
From: SteveG	Read Replies (1) \| Respond to of 12468

<A> Few Regulatory Hurdles Seen For AT&T-Teleport Marriage By Scott Ritter WASHINGTON (Dow Jones)--Regulators would likely bless a marriage of long-distance giant AT&T Corp. (T) and local carrier Teleport Communications Group Inc. (TCGI), though analysts say the deal wouldn't be without detractors. AT&T is close to acquiring the Staten Island, N.Y., company for $10 billion to $11 billion in stock, The Wall Street Journal reported Thursday. The buyout could be announced as early as Friday, the paper said. The acquisition would require approvals from some state regulators, the Federal Communications Commission and the Justice Department's antitrust enforcers. The process would likely take nine to 12 months, analysts said. "It's relatively problem-free," said Scott Cleland, who follows Washington telecom policy for the Legg Mason Precursor Group. Still, he added, "it will undergo the normal mischief from opponents." Big mergers continue to roil the industry as Congress's landmark telecommunications-reform law nears its second anniversary. Criticism is growing among consumer advocates and some on Capitol Hill who say companies are choosing to combine rather than compete. But, some analysts say the deal could help spur local phone competition, particularly in the lucrative market for big-business users. AT&T would bring a valuable customer base to Teleport, making the local carrier a more effective competitor, the reasoning goes. AT&T's entry into Teleport's 60 or so markets - mainly business centers, including cities such as New York City and Los Angeles - "would probably not be viewed as something that would foreclose competition," said Dwight Allen, a telecommunications consultant with Deloitte & Touche Consulting Group. So far, business callers have been the biggest beneficiaries of Congress's push to bring competition to local phone markets. Residential users still have little choice when it comes to picking a local carrier, and analysts say an AT&T-Teleport deal would do little to ease those worries. The FCC and the Justice Department already are considering a somewhat similar situation in WorldCom Inc.'s (WCOM) proposed buyout of MCI Communications Corp. (MCIC), the nation's No. 2 long-distance carrier. "Regulators are concerned that voters - ratepayers - are left behind while businesses get the benefits," Cleland said. "Already, WorldCom-MCI has raised political concerns that the competition is only going to have a business focus." Word of the pending deal comes amid growing regulatory uncertainty, brought about in large part by recent court decisions overturning key components of the telecom law. Still, there are signs that competition is on the horizon. "We would see an AT&T-Teleport deal as setting up an environment in which the local vs. long-distance wars really begin in mid-1999," Janney Montgomery Scott Analyst Anna-Maria Kovacs said in a research note. "We would also see expect consolidation to accelerate, as each regional Bell lines up a long-distance partner."