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To: Jing Qian who wrote (8576)	4/24/1999 2:04:00 PM
From: RTev	Read Replies (2) \| Respond to of 29970

Great story. Thanks for posting it. But do remember, that a T + UMG merger does not necessarily mean an ATHM + RoadRunner merger. Think of the bank mergers that we've all witnessed in that promiscuous industry. When two banks merge, a third company is often brought into the deal to take over a few of the branches where the merged company would have excessive concentration. This is similar: to get the main deal done, T will probably have to give up the RoadRunner branch.

To: Jing Qian who wrote (8576)	4/25/1999 12:51:00 AM
From: ahhaha	Read Replies (1) \| Respond to of 29970

Since Rtev is making penetrating comments about regulation I thought I'd critique the Tribune article. Regulation is the critical factor. My comments are aimed at answering some of Rtev's questions. AT&T's $62.5 Bln MediaOne Bid Likely to Win Approval (Update1) Washington, April 23 (Bloomberg) -- AT&T Corp.'s $62.5 billion bid to buy MediaOne Group Inc. is likely to get approval from federal regulators, who see cable TV as the best chance to crack the local telephone market monopoly, analysts say. I believe this is a wrong assessment. Whereas it is true that the FCC allowed the T-TCI merger to a significant extent because of its opening leverage, inherent in the FCC decisions is the separation of cable telephony and broadband for purposes of regulation. This separation was the crux of the matter which refuted the desires of the common carrier status phalanx. Broadband Internet is a separate and distinct new market which isn't under the restrictions inherited by broadband telephony. If the FCC were to allow T to purchase UMG, the FCC is refuting its own decision to allow T-TCI merger, since the purchase refutes the same grounds that were needed to allow the merger. The principle ground is the promotion of a nascent new market. "Armstrong has Washington under his thumb,'' Scott Cleland, managing director of Legg Mason Inc.'s Precursor Group, told the Bloomberg Forum."At the end of the day, this deal gets approved. This is an idle statement based only on extrapolation. Cleland apparently doesn't know all the factors involved. This is a common and recurring error among the news media, brokerage houses, officials. They haven't done their homework, so they bet on what seems to have been successful. Critics say consumers already face skyrocketing cable-TV rates. "Concentration at this level could stymie competition," said Gene Kimmelman, director of Consumers Union's Washington office. Concentration would do no such thing, but the liberal tradition believes it would and the FCC is compelled to appear that they are working in the populist interest. The FCC owes one to the people. We are way behind in shooting ourselves in the foot. The FCC is considering limiting cable-industry ownership by one company to 30 percent of the U.S. market. The FCC is reviewing that cap after a federal court said it violated the cable companies' right to free speech if the FCC controlled how many customers a company could serve. If the FCC is already considering a cap, it is hard to believe that they would accept pre-emptive refutation and quiet capitulation. I believe that court will be reversed by an appellate court, if the FCC wishes to contest. they should. "I fully expect that the regulators will give it a close review but we don't anticipate any problems,'' said James Cicconi, AT&T's general counsel. "This is all about providing local phone competition." Fortunately for Cicconi he isn't betting his job on his bad opinion. His statement sounds like obfuscation. He doesn't understand why the FCC allowed the T-TCI merger. In fact. I have yet to read anyone who has. They would not have allowed the merger only on the grounds of merit, since it tends to contravene the communication equal access implication of the '96 Act. They allowed it whether they know it or not because broadband is a separate and distinct market relative to copper communications. Within broadband there are two separate and distinct markets too, BB Internet and BB telephony. Markets must have equal access, else they are not free and open. Should the FCC make a decision allowing the formation of a market only for a few? Cicconi shouldn't forget that they are still regulators. Because the cable industry consists largely of government- sanctioned monopolies operating in given regions,... It's nice to hear someone finally admit it. I have made this claim many times on this thread and all disagreed. They said, "you try financially supporting a cable tv system". The implication was that cable tv needed these monopolies to make them go and the public liked fixed rates which could only ratchet up. The outcome of this excellent arrangement has been a complete disaster for all involved. Thank you government, consumer watchdogs, and uneducated public. The FCC lacks the legal authority to force cable providers to provide open access, said George Reed Dellinger, an analyst with HSBC Washington Analysis. It would require action by Congress. This opinion is out of date. FCC was awarded new broader powers to make exactly those decisions. He is extrapolating from the FCC's frustration with failing to drive the RBOC local monopoly to competition. The FCC gained that authority de facto when they allowed the T-TCI merger, because by sanctioning within law an empowerment that achieves the unintended goal of opening access to closed local telephony markets, the FCC effected an assumption of new legal power. The law schools have yet to comprehend the far-reaching precedent setting of that decision. Congress doesn't want that hot potato anyway. Antitrust officials also are likely to scrutinize the combination's effect on Internet service competition, said Washington antitrust lawyer Charles Zielinski, a former chairman of the New York State Public Service Commission. AT&T's alliance with At Home Corp., the No. 1 high-speed cable Internet service, could be seen as a way of denying consumers a choice of Internet service, Zielinski said. This is the point. Whether technically valid or not, it will carry the day. The FCC owes the opposition one.