Snags Remain for Some AT&T Broadband Transfers

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Ninety percent of the approximately 1,200 municipalities that must approve the AT&T Broadband merger with Comcast Corp. have done so, but some of the most recent proceedings are turning into a big headache for MSO negotiators.

In the last 15 days, the Pittsburgh Mayor Tom Murphy vetoed an amendment demanded by the City Council that would guarantee the jobs of AT&T Broadband employees. The council then retaliated with an override attempt.

For their part, Broward County's supervisors approved the transfer July 9, pending the release of more financial information by July 12. Meanwhile, Los Angeles' Board of Information Technology Commissioners July 10 voted unanimously to recommend transfer approval, but with a condition that AT&T Broadband considers a possible deal-breaker.

The Pittsburgh City Council was angered when Murphy vetoed its conditional approval of the transfer. The City Council surprised AT&T Broadband officials by adding an 11th hour amendment to prevent the merged company from any layoffs for 24 months.

In a letter to the council, Murphy said the amendment was "unsustainable under federal and state laws" and could actually cost Pittsburgh jobs, presumably by alienating the company.

By taking the action on the eve of a long holiday weekend, the 120-day period mandated for action on the matter expired before City Council could revisit the issue. If a city does not complete action in 120 days, the transfer is deemed approved.

CLOCK IS TICKING

But the City Council was undeterred. At a July 9 meeting, it voted 6-2 to override the veto, arguing the 120-day clock actually expires later this month. The council has asked the law department to referee.

"Clearly, the window expired on July 3," said AT&T spokesman Dan Garfinkle, expressing disappointment with the challenge.

BROWARD BATTLE

Broward County demands data on revenue and expenses by the operator for certain areas of its county franchise. The county and the local National Association for the Advancement of Colored People (NAACP) office have alleged that AT&T Broadband has spent more time and money in more affluent, white areas than in minority areas.

According to the MSO's own analysis, there is no spending disparity across the county. Approval will be nullified if AT&T Broadband does not furnish the data.

AT&T Broadband is still considering its response, spokeswoman Maureen O'Neil said late Thursday.

The road to transfer approval is rocky in Los Angeles as well. The City Council has yet to rule on the transfer, but Los Angeles's Board of Information Technology Commissioners voted to recommend approval, with one condition. The board wants the corporate parent to shoulder the responsibility for the local franchises. AT&T-Comcast will have three operating units, with responsibility for the Los Angeles franchises resting with MediaOne Group LLC, according to local negotiators.

AT&T Broadband opposes a corporate guarantee, arguing that responsibility should reside with the business unit. The company will lobby council members to delete the condition.

AT&T Broadband did not file for transfer approval in another 1,200 communities, citing local franchise language.

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