Quantcast
An AOL-AT&T Broadband combination is a win-win situation, at least for the two companies. It would give the AT&T division access to AOL's programming, broadcasting and transmission facilities, while AOL would get direct access to AT&T's broadband Internet pipeline.

AT&T BROADBAND ENTERTAINS SUITORS

AOL at Forefront With Candies, Flowers and Promises of Life of Luxury
According to various published reports, AT&T has received at least two more offers for its cable television unit, which is the largest in the country.

The board will meet at the end of next week to decide which proposals are most promising. It is expected to narrow the list in preparation for further negotiations, said a source close to the situation, speaking on condition of anonymity. Despite the increased interest, no deal appears imminent, as the situation remains fluid and the companies each consider stock market and regulatory reaction.

Citing unnamed sources, The Wall Street Journal, reported AOL has proposed merging AT&T Broadband with its Time Warner Entertainment unit, a move expected for weeks by experts.

Time Warner Cable is the country's second largest cable operator.

Under the terms being discussed, AOL Time Warner would acquire up to 49% of AT&T Broadband, allowing AT&T to maintain majority ownership, according to the Washington Post. That structure would also ensure a tax-free transaction for AT&T shareholders, an important negotiating point to win approval of AT&T directors.

However, the Journal quoted one person familiar with the matter, who described AOL's interest as a proposal or concept, rather than a formal bid that included detailed analysis and documentation. "There's a long way to go," this person said.

AT&T declined to comment, while an AOL Time Warner spokesman said his company does not comment "on market rumors or speculation."

The Journal reported that AOL proposes buying a 40% stake in the unit, leaving AT&T with a majority.

An AOL-AT&T Broadband combination is a win-win situation, at least for the two companies. It would give the AT&T division access to AOL's programming, broadcasting and transmission facilities, while AOL would get direct access to AT&T's broadband Internet pipeline.

Naturally, the mega-combo could raise a federal eyebrow or two. A combined AOL-AT&T—which we propose should be called AAT&OLT—would create a cable subscriber base of 28.9 million, controlling about 40% of the market by some estimates.

"The fundamental argument is ‘Do you want one cable operator with that type of dominance?’" David Farber, the Federal Communication Commission's former chief technologist, told The Associated Press in July.

The offer by AOL Time Warner could set off a wave of other bidders as media, Internet and cable companies may try to prevent AT&T Broadband from ending up in the hands of a rival.

Back in July, Philadelphia-based Comcast Corp.—the country's No. 3 cable operator—was the first to try to get into AT&T’s techno-panties, making a $41 billion unsolicited stock swap bid that was rejected by AT&T as too low.

If Comcast succeeded in wooing AT&T with a new offer, the result would be a subscriber base of 23.7 million, much larger than Time Warner Cable’s current size. Many observers said that combination, constituting less than 40% of the market would probably pass federal scrutiny.

True to form, a Comcast spokesman declined comment.

Another possible outcome is for AT&T’s broadband unit to be bought by a smaller cable outfit, in cahoots with a much larger firm with deep pockets.

Cable companies such as Cablevision Systems, Cox Communications or Charter Communications could seek out The Walt Disney Co., Microsoft or Viacom to join in a purchase in return for an equity stake in the combined company—and a little piece of their souls, naturally.

While the consortium approach would probably pass muster with regulators, it would most likely turn into an organizational nightmare.

The Journal, citing people familiar with the situation, reported Sunday (9/9) that Cox is still interested in talking to AT&T, but has not submitted a formal bid. A Cox spokesman did not immediately return a telephone message seeking comment. He was probably really busy or something and just didn’t get around to it. Yeah, that’s it.

After Comcast made its bid, AT&T delayed its original plan to spin off the broadband unit as a standalone company. AT&T could decide to reject all bids and go forward with the spinoff.

NEAR TRUTHS: SPRING BLOOMS
Here come the big guns. (3/28a)
THE COUNT: COLDPLAY IS HOT, COUNTRY'S COOKIN' IN THE U.K.
The latest tidbits from the bustling live sector (3/28a)
CITY OF HOPE TAPS MARCIANO FOR TOP HONOR
This year's philanthropic model (3/28a)
TRUST IN THE TOP 20
Hip-hop is no longer hibernating. (3/28a)
UMG BROADENS SPOTIFY OFFERINGS
Sir Lucian and Daniel are in harmony. (3/28a)
THE NEW UMG
Gosh, we hope there are more press releases.
TIKTOK BANNED!
Unless the Senate manages to make this whole thing go away, that is.
THE NEW HUGE COUNTRY ACT
No, not that one.
TRUMP'S CAMPAIGN PLAYLIST
Now 100% unlicensed!
 Email

 First Name

 Last Name

 Company

 Country
CAPTCHA code
Captcha: (type the characters above)