In response to a recent court decision, the Federal Communications Commission
late Friday decided to suspend two deadlines facing AT&T Corp. on the sale
of cable assets as mandated under the agency's approval of the MediaOne Group
Inc. merger last June.
The FCC, voting 3-1, said it needed time to study the merger conditions in
the wake of a federal court decision that said a batch of FCC cable-ownership
rules -- including one limiting AT&T to 30 percent of multichannel-video
subscribers -- were unconstitutional under the First Amendment.
Under the MediaOne order, AT&T had until May 19 to get below the 30
percent cap by selling cable systems or programming interests. The company had
to tell the FCC by March 20 whether it would meet the asset-sale deadline.
The commission's decision gives AT&T more time to negotiate the sale of
its 25 percent interest in Time Warner Entertainment, which is 75 percent owned
by AOL Time Warner Inc. and includes about 9.7 million cable subscribers, Home
Box Office and the Warner Bros. studio. AT&T and AOL Time Warner have been
at odds over the price of AT&T's stake.
FCC chairman Michael Powell said it was 'prudent for the [FCC] to suspend its
enforcement of the condition until it has adequate time to carefully consider
the impact of the court's decision on the condition.'
He added that the FCC's move 'should not be read as eliminating the
condition, but only as suspending the established benchmarks for compliance
pending further consideration.'
Democrat Susan Ness and Republican Harold Furchtgott-Roth voted with
Democrat Gloria Tristani said the action 'eviscerates the public-interest
protections secured by the order approving the AT&T-MediaOne merger.' She
went on to say that the suspension sent 'the signal that [the FCC] cares more
about the interests of big corporations than it does about maintaining a vibrant
and diverse marketplace of ideas.'
AT&T general counsel and executive vice president James Cicconi issued a
statement saying that the FCC had taken a 'reasonable, measured step,' and that
AT&T would continue to work with the agency 'as it continues to deal with
the court ruling and its implications.'