Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: margin_man who wrote (27111)	11/17/1998 12:02:00 AM
From: Rainmaker	Respond to of 36349

AT&T: TCI Deal Threatened Reuters 5:45 p.m. 16.Nov.98.PST AT&T said Monday it would scrap its proposed US$46 billion acquisition of cable-TV provider Tele-Communications Inc., or TCI, if it is forced by government regulators to open its high-speed Internet access network to rivals. The acquisition might not work economically unless the companies were able to bundle high-speed Internet access over cable-TV with other services, AT&T said. Consumer groups and online service providers, including America Online (AOL)and MindSpring Enterprises (MSPG), have asked the Federal Communications Commission not to approve the transaction without imposing strict conditions on the planned cable Internet service. Specifically, AOL and the others are asking regulators to force AT&T and TCI to let them offer services over the combined networks. "There is no basis in law or fact for the proposed conditions, and the imposition of them -- either here or in a future industry-wide proceeding -- would severely jeopardize the proposed merger and the immense benefits it could offer consumers," AT&T said in comments filed with the FCC in a formal reply to calls for conditions. AT&T and TCI have said the long-distance company's vast financial resources and borrowing ability will speed the upgrade of TCI's cable network to allow telephone service and high-speed Internet offerings. Industry analyst Scott Cleland of the Legg Mason Precursor Group said regulators wanted to approve the deal to stimulate competition in local telephone markets but had serious concerns about the bundling of Internet access and other services. Cleland said the fact that the companies were as yet unwilling to agree to unbundling "shows the economics of their deal must be pretty sensitive." FCC Chairman William Kennard, asked Monday about AT&T's comments after a speech in Washington, said his agency was still gathering facts about the proposed merger. "We're still in the process of creating a record," Kennard said. "I'm looking forward to learning a lot more about this issue." TCI and local phone carrier Bell Atlantic called off a merger in 1994 in part because regulators imposed new price caps on cable television. Under AT&T and TCI's current plans, customers could pay a single price of $30 to $40 per month for Internet access at a speed 50 to 100 times faster than with conventional telephone modems. The access would be bundled with Internet services from At Home, which is owned by TCI and other cable operators. Bundling would give At Home a powerful competitive advantage over other online and Internet services. Opponents have complained the bundling plan would force customers to pay for the At Home service even if they wanted to use the high-speed connection with AOL or another service provider. Consumer groups have also expressed fears that the bundle would give At Home the market power to limit the types of material customers could access over the Internet. AT&T said in its filing that any requirements to separate At Home and high-speed cable Internet access would "fundamentally alter the economics of the proposed merger and impede or all together prevent the offering of telephone service over cable systems." AT&T argued the FCC should not consider the demands for unbundling as part of the merger because TCI, At Home, and other cable companies had planned to go forward with bundled offerings even before the merger was announced. "These epitomize claims that cannot be considered in a transfer-of-control proceeding," AT&T said in its filing. AT&T and TCI stock fell after news of the reply comments spread. Despite a rising market, AT&T's stock closed on the New York Stock Exchange down 31 cents at $60.94. TCI's class A stock fell 31 cents to $39.25 on Nasdaq. Copyright© 1998 Reuters Limited.