AT&T Angered by Pittsburgh Merger Amendments

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The AT&T Broadband-Comcast Corp. march toward merger was marked last week by another delay in Broward County, Fla., and an approval in Pittsburgh that left executives confused and angry.

AT&T Broadband executives did not utter the "L" word, as in lawsuit, but noted that the last-minute amendments tacked on to the approval of the transfer of ownership of its Pittsburgh franchise to AT&T Comcast Corp. may be illegal.

The city council's 8-0 approval vote followed the Cable Communications Advisory Commission of Pittsburgh's June 11 recommendation against the ownership transfer.

But joy over the transfer approval faded quickly after executives got a chance to study the amendments, one of which was not even read aloud before the vote.

To assuage job concerns, AT&T Broadband told the council last week it doesn't intend to cut any local jobs. But one condition voted into the record bans ATT Comcast from eliminating any union or non-union job for 24 months. The flexibility to consolidate, cut jobs or other cost-cutting measures could be key to post-merger debt-retirement strategies.

The council also threw in an amendment giving Pittsburgh the authority in the future to pass a resolution preventing non-discriminatory access to programming by nonaffiliated companies of ATT Comcast.

"AT&T Broadband is surprised and disappointed by the city's extreme response to the franchise change of control request," said senior vice president Jeff Harshman in a statement. While the company was pleased the transfer passed, the amendments were "not thoroughly considered and clearly exceed the city's authority under the franchise agreement and federal law."

Dan Garfinkel, executive director of communications for AT&T Broadband, said it appears that the access amendment is illegal on its face since it runs counter to current franchise language. The company is "still exploring its options," he added.

Though the company is not planning any layoffs, as a publicly traded company, it must reserve the right to make changes, Garfinkel said.

FLA. DECISION DELAYED

Meanwhile, a decision on AT&T Broadband's transfer request in Broward County, Fla., was delayed until July 2, while the parties continue to negotiate on an upgrade schedule for the area.

County commissioners recently received a report alleging that AT&T Broadband has upgraded only in more affluent white neighborhoods in the county's unincorporated areas. Because of that report, the upgrade schedule has become the major issue in the negotiations.

At a meeting last Tuesday, AT&T Broadband executives said they have agreed to a countywide upgrade.

But the speed of the work emerged as a new sticking point. The county is pushing for a 2003 completion date, but AT&T Broadband would like a date in 2004. Negotiations also continue over the amount of the fines that the company would face if it does not meet its deadline.

Elsewhere, the Los Angeles Bureau of Information Technology had not announced its recommendation on the merger by presstime Friday.

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