Kennard Cheers TCI-AT&T Merger

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Washington -- Federal Communications Commission chairman
William Kennard, outlining his 1999 agenda, said last week that he expects the agency to
act on the AT&T Corp.-Tele-Communications Inc. merger within six months.

Kennard, who greeted reporters at the FCC's new
headquarters, the Portals, repeated his view that the alliance between the long-distance
and cable giants could break the local phone monopoly -- the most important goal of the
Telecommunications Act of 1996.

"That's what the promise of the AT&T-TCI
merger is all about," he said.

Kennard, however, said he had concerns about the $48
billion merger -- especially whether minority communities will receive the benefits of
local phone competition at the same time as more affluent Americans.

"I have asked the participants in this merger to come
back to us and tell us how they are going to deploy these new, exciting services, and are
all Americans going to be able to participate in the benefits of this consolidation,"
Kennard said.

With FCC authority to regulate cable rates expiring March
31, Kennard said he was concerned that Americans are paying too much for cable television,
in part because FCC rules adopted before he became chairman were too generous toward cable
operators.

"We have a pretty good idea of why that is: It has to
do with increased programming costs and the way that cable operators were allowed to pass
those programming costs through to consumers," Kennard said.

In other comments, Kennard said the FCC would:

• Do its best to ensure that American homes have
faster access to the Internet. He said access speeds need to be 1,000 times faster than
they are today.

• Issue a report to Congress this month recommending
steps to advance private-sector deployment of broadband networks. The FCC is proposing to
relax regulation of the Baby Bells if they use separate subsidiaries for their
high-speed-data efforts -- a step that the Bells oppose.

• Finish work on the digital must-carry rules in 1999,
but he was not more specific in terms of timing. He said the FCC's preference is to
allow the marketplace to function, although he expressed concern that small TV stations
might not have the market power to secure cable carriage of their digital signals.

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