FCC Pushes AT&T; to Shed a Cable Stake

Federal regulators said they will require AT&T; Corp. to shed its stake in Time Warner Entertainment to meet conditions attached to the telecommunications giant’s $44-billion acquisition of MediaOne Group. AT&T;, the nation’s largest cable company, told the Federal Communications Commission last week that it would sell Liberty Media Group and slash its share of the nation’s cable market to less than 30% as required by the agency earlier this year. However, AT&T; also said that if it cannot complete the spinoff by the May 19, 2001, deadline, it would instead sell its 25.5% stake in TWE, a joint venture with Time Warner Inc., to comply. “We do not believe today’s order requires us to take any action different from those that we are already pursuing to comply with the merger order,” AT&T; said. The Liberty Media spinoff is dependent on a favorable tax ruling because it was part of the tax-free acquisition of Tele-Communications Inc. last year. Whether the company will win such a ruling is still unclear. The agency gave AT&T; the opportunity to appeal to the FCC by Jan. 15 to use its planned spinoff of Liberty Media to comply with the MediaOne merger conditions.