News

Cablevision to Market AT&T Call Plans

2/27/2000 7:00 PM Eastern

Cablevision Systems Corp. cut a marketing deal with
AT&T Corp. to bundle the telephone giant's communications services with
cable-television offerings in New York, New Jersey and Connecticut.

Both companies plan a major marketing push this spring.

AT&T spokesman Mark Siegel said the package will not
offer discounts. Instead, the two companies will offer additional services, such as free
premium-cable channels for a period of time or blocks of free pay-per-view movies.

Siegel said the agreement will also include AT&T local
service in New York, where the company has a resale agreement with the incumbent local
telephone carrier, Bell Atlantic Corp.

Cablevision senior vice president of product management and
sales Pat Falese said the promotion will be available to Cablevision customers from the
expanded-basic tier to the "Optimum" tier of service.

"We intend to make this available for a longer
period," she said. "At minimum several months, and maybe well beyond that."

Cablevision also plans to go all-out marketing the
promotion, using television, outdoor, radio and newspaper ads, as well as direct mail. How
the costs of that campaign will be split between the companies is still being worked out.

Falese said the companies are open to exploring various
ways of expanding the relationship over time.

The deal falls short of AT&T's plans to offer
local telephone service over cable lines. It is expected that local telephony deals with
MSOs will have to wait until after AT&T completes its pending purchase of MediaOne
Group Inc.

Boyd Peterson, vice president and telecommunications
analyst for The Yankee Group, said the agreement gives AT&T a marketing channel in New
York that it sorely needs, especially since Bell Atlantic is gearing up to offer
long-distance service.

"One of AT&T's top concerns is in the New
York metro area because of Bell Atlantic's long-distance authority in that
state," Peterson said. "It allows them to extend their reach in arguably the
most competitive market in the nation. It's not everything AT&T wants, but it
gives them the ability to leverage cable customers."

Cablevision has about 2.8 million subscribers and it passes
about 4 million homes in the New York metropolitan area.

Although it seems a stretch that free Showtime or PPV
movies will be enough for customers to switch long-distance carriers, Peterson said it
might do the trick because long distance is a commodity.

Cablevision gets to tap a customer base that may have been
holding off on premium and PPV purchases at relatively little cost because it is likely
that AT&T will pick up the tab for the free cable services, he added.

March