FCC to Review AT&T-MediaOne Terms

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Federal Communications Commission chairman Michael Powell said Wednesday that
the agency would review AT&T Corp.'s merger conditions with MediaOne Group
Inc. in the wake of last week's court decision throwing out a host of
cable-ownership rules.

'The merger order discussed the statute. Anything that might have been based
on a statute that has been declared inappropriate or unconstitutional has to be
reviewed,' Powell told reporters after a speech to the United States Telecom
Association.

Powell -- who, in recent speeches, has raised doubts about ownership caps --
said he didn't know whether the FCC and the Department of Justice would appeal
the decision. The government can seek rehearing from the full U.S. Court of
Appeals for the District of Columbia Circuit or the U.S. Supreme Court.

Last Friday, a panel of the D.C. Circuit invalidated on First Amendment
grounds a rule that limited a cable operator to serving 30 percent of
subscribers to cable, direct-broadcast satellite and other providers of
multichannel-video programming. AT&T was the only cable operator that
exceeded the cap.

Powell said it was appropriate for the FCC to review the merger conditions
for consistency with the ruling, which also tossed attribution rules that
determine whether a minority cable interest should count toward the cap.

'I just don't find anything about that remarkable,' he added.

Although the FCC required AT&T to divest cable subscribers or programming
interests to comply with the cap, the agency also grounded the merger conditions
on its authority to ensure that a merger would serve the public interest.

Asked whether the review would face resistance from FCC Democrats Susan Ness
and Gloria Tristani, who are likely to support the public-interest rational for
the conditions, Powell would only say, 'That's one argument.'

AT&T has until May 19 to comply with the merger conditions.

Asked whether AT&T still had to meet the deadline, Powell said, 'We don't
know that either. That's part of the review.'

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