Groups Slam AT&T-MediaOne; Deal

Consumer groups are asking federal regulators to block AT&T; Corp.’s bid to buy MediaOne Group Inc., saying the cable merger would give the company too much control in the markets for cable TV and high-speed cable Internet services.

Consumers Union, Consumer Federation of America and the Media Access Project joined Tuesday in opposing the deal on grounds that it violates existing antitrust laws and federal rules that restrict the number of cable customers a single company can control.

With such a large percentage of the market, AT&T; could block new companies from getting into the cable business, which already suffers from inadequate competition and high prices, the groups say.

Under an agreement announced in May, AT&T; would acquire MediaOne, its 5 million cable TV customers and its 25% stake in cable systems owned by Time Warner Inc., the nation’s largest cable TV company.

The deal would turn AT&T; into the nation’s largest cable TV provider.

According to an analysis by the consumer groups, AT&T; would have a 57% market share of total cable households.

The Federal Communications Commission has a cap limiting a company’s share at 30%, but the rule has not been enforced. The FCC is expected to review the ownership restrictions this fall.

AT&T; spokesman Jim McGann disputed the consumer groups’ figures and said they are inflated.

The groups have filed a petition asking the FCC to enforce its ownership rules, which they say would automatically block the merger.

Another petition filed with the Justice Department--which has an ongoing review of the merger--asks that the deal be halted for antitrust concerns.

On the New York Stock Exchange, shares of New York-based AT&T; rose 69 cents to close at $49.75 and shares of Englewood, Colo.-based MediaOne rose $1.50 to close at $70.94.