The U.S. Federal Communications Commission (FCC) yesterday approved the merger of AT&T with cable company Tele-Communications Inc. under the condition that TCI rid itself of its stock in Sprint's Personal Communications Systems division.
After reviewing the four markets that would be affected by the merger-multichannel video programming distribution, local exchange and exchange access, Internet access and mobile telephony-the agency concluded that the deal would likely result in benefits to consumers. The deal would provide a local telephony alternative for many residential customers now served only by incumbent local exchange companies.
"I am optimistic because the combined resources of AT&T and TCI surely will generate a very substantial effort to expand the choices now available to residential phone subscribers in TCI territories," FCC Chairman William Kennard said. "These companies will launch an enormous undertaking to add telephone capabilities to cable services, thus fulfilling one of the goals of the 1996 Telecommunications Act to stimulate rivalries between formerly non-competing technologies and industries."
TCI's shareholders approved the plan and AT&T announced that its shareholders had given approval as well. AT&T said in a statement that it plans to complete the transaction before the end of March.
"For the first time ever, AT&T will have a direct broadband connection to customers' homes, and over time will be able to give consumers a choice in local telephone service," AT&T Chairman C. Michael Armstrong said in a statement.
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