MediaOne's shareholders may jump at the price -- AT&T is offering, through a combination of cash and stock, a 17 percent premium over Comcast's bid -- but others in the industry aren't happy about the muscle-flexing. Consumers Union, a consumer advocacy group, plans to challenge the deal as a violation of antitrust laws and rules meant to limit concentration in the cable industry. But in an effort to let the market have its way, the FCC has temporarily stayed those rules. The deal will be pricey for AT&T: $23 billion would go to finance the cash part of the purchase. Another $1.5 billion would go to Comcast, since MediaOne has already agreed to pay Comcast $1.5 billion in breakup fees. But if the deal goes through, and the Internet goes cable, positioning like this will make some widows and orphans very rich indeed.
NEW YORK: Ma Bell is turning into the Cable Guy. AT&T made a surprise bid late Thursday to break up a planned MediaOne-Comcast merger and claim MediaOne for its own. Doing so would make AT&T the largest cable company in the world (surpassing Time Warner, parent company of TIME Daily), with three quarters of its subscribers in 15 of the top 20 markets -- bringing the ex-monopoly within sight of its pre-breakup glory days. Cable lines aren't just a way for AT&T to get back into the local telephone markets wrested from them in 1984, they're better. Armed with the lines' high bandwith, AT&T is positioning itself to offer phone service, cable TV and high-speed Internet access in a one-stop package.