L.A. Approves AT&T-Comcast Merger


The Los Angeles City Council has approved the merger of AT&T Broadband
and Comcast Corp., but with conditions to which the companies have objected.

One condition is open access. However, this time, it's not about Internet
connections, but video content.

The city is currently in the midst of renegotiations with all of its
franchisees, and the council began a 180-day research process Tuesday to
determine whether it will condition those contracts on nonexclusive programming

The city wants to preserve access by potential competitors to all video
programming. Councilmembers noted that a potential overbuilder, Altrio
Communications Inc., has an application pending to compete with AT&T
Broadband. Altrio has agreed to the nonexclusive programming clause, members

The council decided to amend the AT&T Broadband transfer with language
reserving its rights to prevent nonexclusive programming contracts pending the
outcome of that 180-day fact-finding process. AT&T Broadband objected to the
language, as the company has no plans for exclusive programming deals,
executives said.

The parties had been arguing over the ultimate guarantor of performance for
the six local franchises. The city wanted a corporate guarantee, while the
operator said the guarantor would be a division of AT&T-Comcast Corp.

So the city drafted language requiring that the divisional parent survive the
merger and that it maintain $25 billion in assets. Should it fall below that
level, the guarantee reverts to the city, the ordinance said.

City officials said AT&T Broadband must agree to the conditions by Aug.
12 or the transfer will be deemed denied without prejudice. Negotiations would
then continue, according to Liza Lowery, general manager of the city's
Information Technology Agency.