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To: ahhaha who wrote (1340)	2/10/1998 3:57:00 AM
From: Frost Byte	Respond to of 29970

AT&T, Cable Elite Discuss A Union in Internet Access By LESLIE CAULEY Staff Reporter of THE WALL STREET JOURNAL The nation's top cable-TV companies are in talks with AT&T Corp. about the phone company investing in a cable-industry Internet-access venture, executives familiar with the talks said. The cable companies have been discussing merging Time Warner Inc.'s Internet-access unit, Road Runner, with AtHome Corp., whose backers include cable operators Tele-Communications Inc., Comcast Corp., Cox Communications Inc. and Cablevision Systems Corp. If that merger is completed, AT&T might be interested in a partnership with the venture, the executives said. AT&T declined to comment. The executives said the cable companies have been discussing the possibility of AT&T's contributing to the merged entity its WorldNet Internet unit plus cash. The long-distance company's investment could total as much as $1 billion, most of it cash, the people said. In exchange, AT&T would receive new shares in the beefed-up service. AT&T's new chief executive, Michael Armstrong, who has shown a strong interest in teaming up with the industry, has been directly involved in the negotiations with top officials of the cable companies, the executives said. For AT&T, linking up with the cable companies would give it instant credibility in the growing Internet business, where it has had a slow start. The cable companies, for their part, could benefit from the AT&T name and AT&T's reputation for customer service, a weak spot for cable companies. Under the Road Runner-AtHome merger scenario, Time Warner and its own Internet partner, U S West Media Group, would receive new shares in AtHome, which is publicly traded but continues to be controlled by its big cable allies. In trading Monday on the Nasdaq Stock Market, AtHome closed at $25.50, up 25 cents. The executives stressed that there are numerous issues yet to be worked out, including the number of shares to be doled out to both Road Runner and AT&T, questions over billing, and terms related to valuation and management control. Still, given the eagerness of all the parties to strike a deal, several executives said they remain hopeful. "We all have a strong desire to do something here," said one executive familiar with the talks, adding, "There's always been a natural alliance between long-distance and cable." AT&T and the nation's top cable-TV companies for years have explored the possibility of working together, and AT&T previously had discussions about a possible investment in AtHome. AT&T recently agreed to acquire Teleport Communications Group Inc., a local-telephone company started by TCI and other cable operators, for $11.3 billion in stock.

To: ahhaha who wrote (1340)	2/10/1998 10:30:00 AM
From: Roger Bass	Read Replies (2) \| Respond to of 29970

What you say about the economics of serving businesses is positive. I have my doubts about how fast this might happen, if it means digging up more roads rather than just upgrading plant. I'm inclined to agree about ADSL, wireless seems more real long term. I wonder if wireless might not get to those businesses not already passed by cable first. Does anyone have any information about the business demographics ? I'd be interested to know: - businesses passed by cable - businesses in cable areas, but not passed by cable - how much this overlaps with the metro markets the Winstar, Teligent and other LMDS players are targetting I wonder how clearly ATHM has answered the home vs business question themselves. The cables that have been laid seem to point one way. The economics perhaps another. I work for Intuit, and this question has also been slow to be addressed clearly there too. I'm inclined to be medium relaxed about the backbone issue. Sure, there's a big issue as bandwidth explodes. (Worldcom's John Sedgemore citing 1,000% percent annual growth in internet bandwidth demand). But so many people who understand this (collectively) far better than us are must have done the sums, and seen that there's huge opportunity there. ATHM themselves, not least, have surely thought about how and when they'll need to scale the backbone beyond their current architecture. Any involvement of AT&T looks positive too for enabling a massive roll-out. Not that it's trivial. But solutions will come along just-in-time, as they always seem to on the internet, and broadband industry concentration could mean deployment of new technology is faster.