AT&T, Fox Ink 10-Year Retrans Deal

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AT&T Broadband & Internet Services said it signed a
10-year retransmission-consent and digital-carriage agreement with Fox Television Stations
Inc., following a similar deal with NBC.

This time, there were no provisions involving cable
networks owned by News Corp.'s Fox Entertainment Group. The deal with General Electric
Co.'s NBC in June also involved rate increases related to CNBC's and MSNBC's Olympic Games
coverage.

AT&T Broadband spokeswoman LaRae Marsik pointed out
that the MSO already has deals in place with such Fox cable services as FX and Fox Family
Channel. The latest came this month, with The Health Network and the Fox Sports Net
regional sports services.

Marsik said last Friday that the company was optimistic
that negotiations would prove fruitful with the other two big broadcast networks, The Walt
Disney Co.'s ABC and CBS Corp.'s CBS.

The latter's 13 owned-and-operated stations signed a
digital-broadcast-carriage pact last December with Time Warner Cable -- the first such
deal between a broadcaster and an MSO.

The Fox deal grants AT&T Broadband consent to
retransmit the signals of the 22 Fox-owned broadcast-TV stations through 2009, as well as
their planned digital signals.

As with its NBC deal, covering 13 owned stations, the cable
operator's deal with Fox provides that digital programming will be offered to subscribers
only in systems rebuilt to 750-megahertz or greater capacity in order to avoid having to
displace existing cable networks for new Fox digital offerings.

AT&T Broadband also reserved the right "to adjust
horizontal resolution" of high-definition signals to better manage bandwidth, it
said.

NBC's agreement runs through 2008 -- the last year of its
Olympics-coverage commitments -- while the Fox deal runs through 2009. But Marsik said the
difference was not necessarily due to the Olympics. "You can't do a straight-across
comparison," she added. "[The contracts] don't all come up at the same
time."

In addition, Fox and AT&T Broadband agreed to work
together to provide Fox's high-resolution programming to the MSO's 10 million subscribers
through both traditional TV sets and digital-TV sets.

Last week's joint announcement called attention to the
point that the Fox and NBC agreements came about without digital must-carry regulations.

As AT&T Broadband CEO Leo J. Hindery Jr. said in a
prepared statement, "Without the requirement of regulation, cable-industry leaders
and broadcasters are continually working together to reach agreement on vital developments
such as high-definition television and retransmission consent."

Fox's owned stations, which are in nine of the top 10
markets, reach 40 percent of U.S. TV households.

Although AT&T Broadband now has more than 10 million
subscribers, that count will swell to 16 million once its merger with MediaOne Group Inc.
and other lesser deals close.

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