Sens. Urge Quick FCC Action on AT&T-TCI

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Washington -- Two U.S. senators are pressuring the Federal
Communications Commission to expedite its review of AT&T Corp.'s $48 billion
acquisition of Tele-Communications Inc.

Sens. Ted Stevens (R-Alaska) and Conrad Burns (R-Mont.), in
an Oct. 10 letter to FCC chairman William Kennard, said speedy approval would give a
much-needed boost to local phone competition and permit the combined entity to invest
billions of dollars in Internet services.

"We are concerned that consumers do not yet have a
choice of providers for their local phone service," the senators wrote. "This
merger can help to rectify this."

Because Stevens is chairman of the Appropriations Committee
(which funds the FCC's annual budget), and Burns is chairman of the Commerce
Committee's Communications Subcommittee (which has oversight of FCC operations), the
letter won't go unnoticed by Kennard and his top aides.

The letter's timing was interesting because it was
sent not long after FCC officials told TCI and AT&T that due to the size and
complexity of the merger, it would take the agency several months to analyze it and
decide. Initial comments aren't due until Oct. 29.

The FCC's Cable Services Bureau, under new chief
Deborah Lathen, is spearheading the commission's review. Lathen indicated last month
that she would seek commitments from AT&T to roll out advanced cable and
telecommunications services to minority communities.

In their letter, the senators indicated that a protracted
FCC review was unnecessary.

"The prospect of facilities-based local entry would be
reason enough to persuade us that the merger is in the public interest," they said.

The senators also said the investments that AT&T will
make to upgrade TCI's plant to furnish two-way advanced telecommunications services
would create highly skilled jobs and expand consumer choice in their rural states.

"Consumer across America, urban and rural alike, stand
to benefit from this merger," they wrote.

AT&T chairman C. Michael Armstrong said last week that
he expects the merger to go through, although bumps in the road are always possible.

"So far, it has gone very smoothly. We see no
obstacles," Armstrong said. "On the other hand, we haven't dealt with the
full process, which might present some issues. I feel confident that we will be able to
satisfy those issues, whatever they might be."

Cable sources said they were curious to see whether America
Online Inc. will use the Oct. 29 filing to urge the FCC to withhold approval unless
AT&T agrees that its cable-modem subscribers will have equal access to the
Internet-service provider of their choice.

AOL is concerned that it will lose subscribers to cable
operators that require their cable-modem-service subscribers to buy high-speed network
capabilities and online and ISP services in a package.

In a recent FCC filing, AOL said its subscribers should
have the right to connect with AOL over cable-broadband plant without the need to pay two
subscription fees -- one to the cable ISP, and a second to AOL.

Armstrong said his company would have an open-door policy
toward ISPs if they are willing to meet unspecified "terms and conditions."

"We welcome the ISPs, the aggregators, the portals and
the online subscribers to work on cable infrastructure," Armstrong said.

But he indicated that access was not a right, but something
that was appropriately a business negotiation.

"The issue is really those terms and conditions. That
is no different than HBO [Home Box Office] negotiating for a cable platform, in order to
have a channel or priority on a position in terms of the offering," Armstrong said.

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