Despite Skid, TCI ‘Deal Done,’ AT&T; Chief Says

AT&T; Corp. Chairman C. Michael Armstrong on Tuesday said he will not renegotiate his proposed $44-billion purchase of cable giant Tele-Communications Inc., despite a big decline in AT&T;’s stock price and misgivings within TCI.

Since AT&T; agreed on June 24 to buy TCI, the long-distance giant’s stock price has fallen 14% as Wall Street has turned thumbs down on the deal, originally valued at $48 billion.

Investors are concerned that upgrading TCI’s aging cable systems for phone service and high-speed Internet access will prove complex and costly. And that, investors fear, could trim the cherished dividends paid by AT&T; shares, which are the most widely held in the nation.

But Armstrong, after testifying before the Senate Judiciary subcommittee on antitrust, told reporters that those concerns are misplaced. “There is nothing to those rumors,” Armstrong said. “The deal is done, signed, sealed and delivered.”

Armstrong reiterated his confidence in the TCI deal during and after his testimony Tuesday.

He appeared before the panel with Robert Iger, president of ABC Inc., John Marselle, president of Sun Microsystems Federal and Richard Parsons, president of Time Warner Inc. The executives were called to testify about how consolidation in the telecommunications and entertainment industries was affecting prices and competition.

Armstrong’s Washington appearance comes after a series of unprecedented and high-profile meetings with analysts, the news media and policymakers aimed at quelling investor concern about AT&T;’s bid to buy TCI.

It also follows an unusually frank assessment of the deal by TCI President Leo Hindery, who told The Times on Friday: “We underestimated the market reaction.”

Armstrong said during his testimony that he anticipated a short-term drop in the stock, but that he believed the confidence of investors would rebound once they better understood the deal and its potential to deliver cutting edge telecommunications services.

AT&T;’s acquisition of TCI would give it a way to offer high-speed Internet access, local and long-distance phone service using TCI’s lines instead of traditional phone networks.

Cable systems owned or affiliated with TCI reach roughly a third of U.S. homes.

AT&T; stock rose 88 cents to close at $56.19 on the NYSE.