L.A. Nixes AT&T-Comcast Transfer

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AT&T Broadband has declined the conditions demanded by the city of Los
Angeles in return for transfer approval of its franchise to Comcast Corp., so
the city has denied the transfer without prejudice.

If the companies consummate their merger -- for instance, by changing
branding or staff in the Los Angeles franchises -- the city will find AT&T
Broadband in material breach of its franchise, according to Liza Lowery, general
manager of the city's Information Technology Agency.

There are two areas of disagreement between the city and the company. When
the City Council approved the merger, it tacked on a requirement reserving its
rights to add a ban on exclusive programming agreements.

Also, the council is in the midst of a study on 'open program access,' and at
the urging of competitor Verizon Communications, it inserted language that could
allow it to change AT&T Broadband's operational terms dependant on the
result of that study.

AT&T Broadband has also balked, according to the city, on a mandatory
arbitration by consumers.

AT&T Broadband has dropped the practice -- in fact, the MSO notified
consumers of the change in its business practice with ad in papers including the
Los Angeles Times -- but Lowery said the company does not want that issue
included in the transfer resolution.

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