Other AT&T Matters Disturb L.A.

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Cable-modem access wasn't the only significant issue
muddling the transfer of ownership of Tele-Communications Inc.'s cable properties to
AT&T Corp. in Los Angeles.

City regulators also expect the companies to put $1 million
in escrow as a term of the transfer while the parties continue to argue over franchise-fee
payments.

Los Angeles has been trying for weeks to get TCI to open up
its general ledger on its East San Fernando Valley system so that the city can verify that
the operator has paid enough fees for the revenue on its 99,000 subscribers. A city
auditor even flew to TCI's regional headquarters in Northern California late last
year, returning empty-handed.

TCI officials argued that opening their books would make
them subject to state and local open-records laws, meaning that competitors could look at
the figures, too.

If the city eventually approves the TCI transfer, the
franchisee must create the escrow account within 15 days. The city will then take four
months to conduct an audit. If Los Angeles discovers that TCI has underpaid its dues, the
city will take that amount from the escrow account.

The transfer proposal, which is still subject to City
Council approval, requires AT&T to provide all schools with cable modems and subjects
the high-speed product to Los Angeles' customer-service standards.

-- Linda Haugsted

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