AT&T, Comcast Need Franchise Approvals


Sources at AT&T Corp. and Comcast Corp. confirmed Tuesday that both
companies will need to transfer franchises to complete their $72 billion merger,
which was announced last month.

Soon after the companies agreed to merge, officials at AT&T and Comcast
were unsure whether one of them or both of them had to seek local approvals.

Company sources said Tuesday that both companies had to seek local approvals
based on the structure of the new company, which is billed as a Comcast takeover
of AT&T Broadband with former AT&T shareholders owning a majority of the

Comcast and AT&T sources were quick to note that it was possible that not
all franchises had to be transferred.

The companies were looking at individual franchise agreements to determine
whether changes in control due to the merger represented transfers of the
franchises, triggering local consent.

'We are looking to determine what consents we are going to need. But I don't
have any numbers,' AT&T spokesman Jim McGann said.

Comcast spokeswoman Karen Buchholz said the MSO needed to transfer a
'portion' of its franchises, but she didn't know a specific number.

After the merger, AT&T Comcast will serve at least 22 million subscribers
in 41 states. Both companies have hundreds of franchise agreements.

When AT&T acquired Tele-Communications Inc. and MediaOne Group Inc., a
few local governments tried to peg franchise transfers to commitments from
AT&T to carry multiple Internet-service providers. Those efforts largely

Some local officials might revive that effort in the AT&T-Comcast deal in
reaction to the bankruptcy of Excite@Home Corp., which briefly interrupted
service to high-speed-data cable subscribers.

Advocates of cable carriage of multiple ISPs claimed that Excite@Home's
failure showed that customers need alternative ISPs on cable systems in the
event that an access provider discontinues service.