Armstrong: Were Not Buying AOL

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Washington -- AT&T Corp. chairman C. Michael Armstrong
dismissed reports last week that his company is seeking to buy America Online Inc., the
largest Internet-access provider in the world.

He also said the AT&T-Tele-Communications Inc. merger
should close Tuesday (March 9).

Armstrong, in remarks at the American Enterprise Institute
here, said the reports were untrue, denying that AT&T was the source of a recent Business
Week
report.

"I don't know where in the world they got it --
not from us," he said. "We are absolutely not interested in, nor are we
pursuing, acquiring America Online."

Still, buying AOL would likely eliminate an ongoing
lobbying headache for AT&T.

Since last June, when AT&T announced its $48 billion
purchase of TCI, AOL has been urging local, state and federal regulators to require
AT&T to open its cable facilities to competing Internet-service providers.

Asked about the AOL lobbying threat, Armstrong repeated the
response that he gave at the National Press Club Feb. 10: that AT&T's cable
facilities would be open to providers with demonstrated consumer demand. He said AT&T
would make the most money by maximizing the utilization of its networks.

Regarding the TCI merger, "I think I am pointing
toward the 9th of March," Armstrong told reporters as he departed.

After the deal's completion, Armstrong said, he would
be open to discussing commercial deals with content providers such as AOL.

But Armstrong added that cable operators had to manage
traffic carefully to guard against flooding the network and cutting access speeds.

"The more you put on, the lower the performance,"
he said.

Cable operators can maintain performance by upgrading
systems, especially by deploying fiber to nodes connected to fewer and fewer homes, he
said.

"It's the last mile that counts," he added.

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