Feds in line for AT&T

FCC staff OKs MediaOne buy if unit is spun off

WASHINGTON — Consumer advocates said they were generally pleased with an FCC staff recommendation that would give AT&T approval for its planned acquisition of MediaOne on the condition that it spin off either Liberty Media or its 25% stake in Time Warner Entertainment.

Consumer Union’s Gene Kimmelman said Tuesday that either option is “fine and good.” He’s concerned, however, about reports that the FCC staffers would give AT&T a year to come into compliance with any conditions. Kimmelman noted that the original FCC regulations lay out a 60-day deadline for complying with its rules and that a year is “needlessly” liberal. AT&T had requested up to 18 months to comply with any conditions demanded by the agency.

FCC staffers handed up their recommendation late last week and the five FCC commissioners may vote on the matter as soon as May 15. Agency staffers cautioned, however, that the commissioners may want to revise the recommendation in ways that could delay the vote for several weeks, if not months.

The FCC staff recommendation was set up by a decision last October that set general rules limiting the size of cable companies: No company may reach more than 30% of the homes which subscribe to pay television services.

Loophole limbo

The October ruling created a loophole, however, that allows AT&T to claim that it’s insulated from management decisions at Time Warner Entertainment and thus should not have its 12 million cable subs counted against its ownership cap. That loophole would be closed if AT&T retained a controlling ownership stake in a company that sells programming.

Essentially, the FCC determined it would be impossible for AT&T to remain insulated from management divisions at TWE if the telco/cable giant also owned a stake in a company selling programming to Time Warner.

Both AT&T and FCC officials refused to comment on the staff proposal.

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