Armstrong: More Cable Deals Coming

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Washington -- AT&T chairman C. Michael Armstrong said
last week that he expects to sign more telephone deals with cable operators to reach
between 60 percent and 70 percent of U.S. homes with broadband facilities.

After last week's deal with Time Warner Cable and the
close of its merger with Tele-Communications Inc., AT&T would only reach about 40
percent of homes, he added.

"So ahead of us, there have to be more deals, if you
would, with cable companies. And of course, we are open to all forms of
arrangements," Armstrong said in a speech at the National Press Club here.

To fill in the gaps, AT&T would use fixed wireless
facilities and resell the services of incumbent phone networks, he said.

In other comments, Armstrong said America Online Inc. had
nothing to fear because AT&T's high-speed Internet service would provide "an
open cable interface and attract as much content as we can commercially negotiate."

He said government regulators are correctly staying out of
the open-cable debate that AOL launched this past June, when AT&T announced its deal
to acquire TCI.

"I think that it is absolutely appropriate not to
regulate those negotiations," he said. "The regulators don't get in the
middle of ESPN's and the cable industry's negotiations."

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