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Powell: AT&T-Time Warner marriage may work

WASHINGTON — Breaking his silence, Federal Communications Commission chairman Michael Powell said Thursday the agency is reviewing an earlier directive that AT&T shed its stake in Time Warner Entertainment, considering that a federal court has voided the relevant cable ownership cap.

When giving AT&T the go-ahead to merge with MediaOne, the FCC ordered AT&T to sell off its 25 percent interest in TWE by May 19.

Otherwise, the telco would go over the ownership cap in question, which barred any one cabler from reaching more than 30 percent of the national market.

On March 2, the U.S. Court of Appeals for the District of Columbia struck down several cable ownership caps as unconstitutional, including the 30 percent rule.

“The (MediaOne) merger order discussed the statute. Anything that might have been based on a statute that has been declared inappropriate or unconstitutional has to be reviewed,” Powell told reporters after delivering a luncheon speech to the United States Telecom Assn.

Powell had previously declined comment on the matter.

Upcoming deadline

As it stands now, AT&T has until May 19 to divest of TWE, which includes cable systems and Warner Bros.

For months, the telco has argued that AOL Time Warner, which owns the remaining stake in TWE, hasn’t negotiated fairly.

AT&T has repeatedly suggested it might instead sell of its cable systems stake in Liberty Media Group, but only if it gets a favorable tax ruling from the IRS.

The telco declined to comment on Powell’s statements Wednesday, saying it is still digesting the court order.

Likewise, Powell said the FCC won’t reach any sort of decision until it finishes reviewing the appellate ruling.

“Of course the outcome might be influenced,” Powell said. “Nothing is unthinkable.”

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