Tristani Likely to Support TCI-AT&T Merger


Washington -- FCC commissioner Gloria Tristani last week
went about as far as a regulator will go these days in foreshadowing how she will vote on
AT&T Corp.'s proposed merger with Tele-Communications Inc.

In a speech Nov. 8 to state regulators in Orlando, Fla.,
Tristani all but declared that she will support AT&T's takeover of TCI, while at
the same time dropping hints that she is less enthralled with two pending
telephone-company mergers.

Speaking to the National Association of Regulatory Utility
Commissioners, Tristani cast a favorable light on the $48 billion merger, saying that it
has the potential of introducing greater competition in local phone markets.

Although she said she would reserve final judgment until
she reviews the Federal Communications Commission's staff's recommendation,
Tristani said consumers would benefit if TCI could rely on AT&T's expertise to
crack the local phone monopoly.

"It could be an opportunity to stimulate competition
in the residential market by giving TCI specialized expertise, greater financial resources
and a trusted brand name," she said.

Tristani's comments were the most upbeat about the
merger since June, when FCC chairman William Kennard greeted the news by saying that the
deal was "eminently thinkable."

He chose those encouraging words deliberately: When news
reporters spread the word in mid-1997 that AT&T was in talks to merge with SBC
Communications Inc., then-FCC chairman Reed Hundt said such a combination, designed to
reassemble the old Bell system, was "unthinkable."

Tristani's endorsement was important. More so than her
four colleagues on the FCC, Tristani, a former New Mexico state phone regulator, has
questioned whether media- and telecommunications-industry consolidation since the passage
of the 1996 Telecommunications Act has benefited consumers in the form of more choices and
lower prices.

In contrast with her remarks about the AT&T-TCI union,
Tristani voiced doubts about two pending telephone-company mergers: SBC Communications
Inc.'s $62 billion takeover of Ameritech Corp., and Bell Atlantic Corp.'s $53
billion merger with GTE Corp.

One condition that she hinted at was a requirement that SBC
continue Ameritech's push into the cable-television business.

"Some have said that allowing SBC to buy Ameritech
will harm consumers because SBC will phase out that video business, just like they did
when they bought [Pacific Telesis Group]. I would argue that competition in the cable
market is relevant to the FCC's review," she said.

SBC spokesman Selim Bingol said SBC was not commenting on
Tristani's cable views.

In May, SBC chairman and CEO Edward Whitacre Jr. praised
Ameritech's cable efforts before a Senate subcommittee, but he declined to promise
that he would continue the service after the merger was approved.

Tristani said the FCC has to consider whether to approve
the mergers based on assurances that the combining telcos never intended to compete.

"If such competition was unlikely, then consumers are
not losing a choice that they otherwise would have had," she said. "But I am not
sure whether we've given this form of competition enough of a chance after
two-and-a-half years."

SBC and Ameritech said they must merge in order to have the
resources to invade 30 local phone markets outside of their region, but Tristani seemed
unimpressed with that rationale.

Bingol insisted that SBC-Ameritech's plan to compete
in the top 50 markets -- 20 in-region and 30 out-of-region -- was impossible to achieve as
separate companies.

Tristani said the FCC has the authority to impose
conditions in connection with approving the SBC-Ameritech merger.