Survivor Zeglis Is Hinderys Boss

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John D. Zeglis, the former AT&T Corp. general counsel
and current AT&T president, may be best known for the job he didn't get.

That's the one held by his boss, AT&T chairman and CEO
C. Michael Armstrong, the former Hughes Electronics chief whom AT&T's board of
directors chose over Zeglis last October.

After former president John D. Walter bailed out in July
1997, general counsel Zeglis was depicted in one headlinein The New York Times
as the "No. 2 Without Rivals" and in USA Today as the "likely
front-runner" for outgoing chairman and CEO Robert Allen's job.

Unfortunately for Zeglis, it didn't work out that way.

Now, the 51-year-old Zeglis, a Harvard-educated lawyer who
helped AT&T Corp. shear off from the Bell System in 1984 then signed on as a staff
lawyer, is being called upon to execute on AT&T's $48 billion gamble in merging with
Tele-Communications Inc.

After the merger closes early next year, Zeglis will be
chairman and CEO of AT&T Consumer Services Co., which will include all of the combined
companies' local, long distance, wireless and international communications, cable and
Internet-access services marketed to consumers.

He'll also be Leo J. Hindery Jr.'s boss. And how long he'll
be Hindery's boss has been the subject of spirited speculation since the merger plans were
announced in June. Hindery is widely seen as having skillfully dressed TCI up for sale by
clustering the disparate systems and launching digital TV and high-speed data over the
MSO's formerly derided networks. Along with the money he's made so far, he has stock
options worth well over $300 million.

Some TCI watchers think Hindery will cash in and move on
after the deal closes. Others think he may displace Zeglis.

The current consensus: Hindery, 50, will see the merger
through to completion, try the arrangement out for a while and then decide whether to
stay.

That's not very far to climb out on the limb, to be sure.

Salomon Smith Barney Inc. cable analyst Spencer Grimes said
he initially figured Hindery wouldn't stick around for long. Now, Grimes says he's having
second thoughts about that. The key could be Hindery's autonomy and whether the culture is
entrepreneurial enough for him to savor the challenge of proving cable plus telephony plus
data is more than the sum of the parts. For his part, Hindery has maintained that he isn't
going anywhere.

"I've got to believe Mike Armstrong doesn't want to
lose Leo and his familiarity with the industry and the company," Grimes said.

AT&T did not respond to requests to interview Zeglis,
and Hindery did not return calls seeking comment. TCI executives have been keeping a lower
than usual profile in recent weeks due to the imminent closing of the merger.

Even with TCI's affiliates, AT&T will only have
hardwire access to about one-third of the country's households. Getting to the rest will
certainly mean cutting deals with other cable companies.

For those reasons, Wall Street analysts on the cable side
are hopeful Hindery will stick around.

"My expectation is that these guys are smart enough
guys," said Janco Partners Inc.'s Ted Henderson, adding Armstrong and TCI chairman
John C. Malone to the mix of men whose assets are on the line. "They know there's too
much at stake here, and there's been enough history of [disasters] when egos get in the
way."

But few are betting against Zeglis' staying power. Though
AT&T's board chose Armstrong over him, it also made Zeglis vice-chairman rather than
lose him when Illinova, a Midwestern utility company, offered him its top job. Even while
Walter was president, Zeglis played a leading role in negotiating a possible merger with
SBC Communications Inc. last June.

A former partner at Chicago's Sidley & Austin, Zeglis
worked on the Bell System breakup before joining AT&T. He's risen through the ranks
ever since.

"Zeglis knows the telecommunications industry better
than anyone in that company," Brian Adamik, an analyst with The Yankee Group, said.
"He's a brilliant negotiator. And he's really the bedrock of AT&T in terms of its
overall position in the market."

After the ink dries on the acquisition, it's AT&T that
will have to execute, Adamik said. AT&T is running the show, but will need cable guys
to deal with other cable guys. He doesn't see much of a problem in Zeglis and Hindery
working together.

"I don't see any major areas of concern. Zeglis runs
this organization, period. Hindery will work for him," he added.

"Zeglis' background, skill set and experience [are]
completely different from Leo Hindery's," Bear Stearns & Co. telecom analyst
William Deatherage said. "AT&T probably needs both."

"One thing Zeglis has is tremendous institutional
knowledge of AT&T, which has to be valuable to Michael Armstrong and Dan Somers,"
Deatherage said. "[That is something] not only Hindery lacks, nobody else in the
AT&T senior leadership has [it, either]. So he can uniquely bring that. He is a
brilliant lawyer and regulatory tactician. And the industry hasn't transformed to the
point where that isn't still an incredibly important skill."

On the regulatory front, there are still key implementation
aspects of the Telecommunications Act of 1996 to sort through and battles to be fought on
the level of access charges that AT&T, as a long-distance carrier, has to pay to local
telephony companies to complete calls.

"There are still billions of dollars at stake in those
proceedings," Deatherage said.

Zeglis' first foray into the cable regulatory arena looks
golden so far. In September, he entered the lions' den by addressing the National
Association of Telecommunications Officers and Advisors' annual conference. Some of those
local regulators came with a grievance: AT&T determined that it only needed to seek
franchise transfer approval in about one out of every four TCI franchise territories.

Zeglis attacked the issue head-on, promising that all of
TCI's franchise commitments -- and the local officials who made those commitments -- will
remain in place after AT&T takes over.

Outgoing NATOA president Tom Weisner, director of public
property for the city of Aurora, Ill., said he was impressed.

"It's like if you experience the guy, you can't help
but be impressed by his energy level. And I was impressed by a fair amount of
forthrightness. He doesn't beat around the bush," Weisner said.

Another gauge of his performance: No local franchises
complained to the Federal Communications Commission about the AT&T-TCI merger,
"which is notable," Hindery said in a conference call to analysts on Nov. 13.

For those handicapping whether Hindery could maneuver
Zeglis out of the picture, there's the AT&T brain-drain factor to take into account.

Only last month, Jack McMaster, vice president of the $23
billion consumer markets division, bailed out to join several former AT&Ters at Qwest
Communications International Inc., where he will run the international operations. He'll
be working for former AT&T domestic long-distance chief Joseph Nacchio, who left to
become Qwest's CEO in late 1996.

McMaster's predecessor at AT&T, Gail McGovern, left in
August after 24 years at AT&T to join Fidelity Investments. Other defectors include
former COO Alex Mandl, who left in mid-1996, Internet service CEO Tom Evslin, who split in
October 1997 and mergers-and-acquisitions vice president Dennis Carey, who departed this
past May.

"The last thing AT&T and Armstrong need are more
defections," Adamik said.

Then again, Armstrong has invested heavily in cable.

Said Henderson: "I think that the assets are
broadband. And Hindery has a better background in broadband … I would predict that
Hindery survives."

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