WASHINGTON -AT&T Corp. told a federal regulator last week that Time Warner Inc. was creating obstacles to the 25-percent stake in Time Warner Entertainment that the telco has owned since June.
Time Warner's claim that AT&T has all the power it needs to divest its stake in TWE by May 19, 2001, is incorrect, claimed AT&T general counsel James Cicconi. That's because AT&T is heavily reliant upon Time Warner's cooperation-especially if it wants to sell its stake to the public.
Time Warner has decided not "to take even the most basic steps to facilitate AT&T's timely withdrawal from TWE," AT&T said in a letter to Federal Communications Commission chief of staff Kathryn Brown. As a likely buyer of AT&T's stake, Time Warner has motivation to be uncooperative because that approach might result in "artificially suppressing" the price of AT&T's TWE stake, which some estimate to be worth $16 billion.
AT&T said it "prefers" to sell the TWE stake to comply with FCC cable ownership rules. Cicconi suggested the FCC could help resolve the impasse by making the America Online Inc.-Time Warner merger contingent upon Time Warner's sub-mission to binding arbitration on the disposal of AT&T's interest in TWE.