EU Approves $48 Billion AT&T-TCI Merger

Strategic Insights -

The European Union's (EU) European Commission (EC) has approved the $48 billion merger between AT&T Corp. and Tele-Communications Inc. (TCI), citing minimal impact on EU competition. The EC's approval comes after a series of comments from companies such as America Online Inc. (AOL) expressing dissatisfaction with the merger. AT&T and TCI plan to offer a cable TV access package with mandatory access to the @Home Network, sparking criticism from ISPs who claim the plan restricts competition.

Key Takeaways:

  • The EU's European Commission (EC) has approved the $48 billion merger between AT&T Corp. and Tele-Communications Inc. (TCI), despite concerns from rival ISPs.
  • The merger is focused on the US market, with the EC concluding that its effects on EU competition will be marginal.
  • AT&T and TCI plan to offer a cable TV access package with mandatory access to the @Home Network, sparking criticism from ISPs who claim the plan restricts competition.
  • America Online Inc. (AOL) and other ISPs have expressed dissatisfaction with the merger, citing concerns about competition and equal access to cable infrastructure.
  • The Federal Communications Commission (FCC) is currently studying the proposed merger and plans to hold two "en banc" hearings at its headquarters in Washington, D.C. on December 14.
  • The FCC's Web site is http://www.fcc.gov.
  • The merger follows a trend of consolidation in the telecommunications industry, which has been facilitated by the Telecommunications Act of 1996.

Statistics:

  • The proposed merger between AT&T Corp. and Tele-Communications Inc. (TCI) is valued at $48 billion.
  • The EU's European Commission (EC) received 17 comments from companies regarding the merger, including concerns from America Online Inc. (AOL).
  • AT&T and TCI plan to offer a cable TV access package with mandatory access to the @Home Network.
  • The @Home Network is a high-speed cable access Internet service.
  • The merger will be subject to a second four-month investigation by the EU regarding the joint venture with British Telecommunications plc.
  • The Federal Communications Commission (FCC) is currently studying the proposed merger and plans to hold two "en banc" hearings at its headquarters in Washington, D.C. on December 14.

Sources:

  • Reuters
  • "Newsbytes News Network" (http://www.newsbytes.com)
  • Robert MacMillan, Newsbytes
  • "The European Commission" (http://europa.eu/)
  • The Federal Communications Commission (FCC) (http://www.fcc.gov)
  • America Online Inc. (AOL) (http://www.aol.com)