Video, Long Distance Sink AT&T

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Operational cash flow at AT&T Corp.'s video operations was down 3 percent
in the fourth quarter ended Dec. 31, capping off a year the company would like
to forget.

AT&T's overall earnings plunged 42 percent in the fourth quarter, fueled
by a continuing decline in long-distance revenue.

AT&T chairman C. Michael Armstrong said in a conference call with
analysts that the decline at the AT&T Broadband unit was due to increased
programming and labor costs, the timing of new network launch payments and
marketing-distribution reimbursements from programmers.

Still, Armstrong noted the cash-flow decline and promised changes. 'That's
not where it should be, not where we want it to be,' he said. 'We have a
definite focus on that, and it will get better.'

Video cash flow was $736 million in the period compared with $759 million in
1999. Operating cash flow for the entire AT&T Broadband unit was $507
million in the fourth quarter, down 13.2 percent from $584 million in 1999.

AT&T Broadband added 825,000 new revenue-generating units -- a benchmark
of digital-cable, data and telephony customers -- in the quarter, ending with
4.4 million. Revenue growth was up 11.8 percent to $2.5 billion.
Basic-subscriber growth was 0.4 percent. The MSO ended the year with 16 million
video subscribers.