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Federal Communications Commission
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Washington, D.C. 20554
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

Report No. CS 99-2 CABLE SERVICES ACTION February 17, 1999


The Commission has adopted an Order approving the transfer application of Tele-Communications, Inc. ("TCI") and AT&T Corp. ("AT&T") subject to the following conditions: (1) the transfer of TCI's ownership of Sprint PCS tracking stock prior to consummation of the merger to a trust pursuant to a trust agreement that has been approved by the Commission; and (2) AT&T's adoption of its proposed policy statement regarding its policy for distribution to Liberty Media Group shareholders of the economic benefits of its ownership of the Sprint stock. The Commission reviewed the four services affected by the proposed merger: multichannel video programming distribution ("MVPD"), local exchange and exchange access, Internet access, and mobile telephony. The Commission concludes that the merger, as conditioned, is likely to result in benefits for consumers, including a local telephony alternative for many residential customers now served only by incumbent local exchange companies, without creating competitive harm with respect to other services.

The Commission received 31 comments and reply comments and numerous ex parte submissions regarding this merger. Key issues raised by the commenters and addressed by the Commission include:

  • CMRS spectrum cap. The Commission will require the transfer of TCI's ownership of Sprint PCS tracking stock prior to consummation of the merger to a voting trust that will shield the merged company from the Commission's CMRS spectrum cap attribution rules. In addition, AT&T must adopt its proposed policy statement regarding the distribution to Liberty Media shareholders of dividends and other economic benefits associated with its ownership of the Sprint stock.

  • Open access to broadband facilities for the provision of Internet services. Finding that the merger will not harm competition for Internet services, the Commission refrains at this time from imposing conditions with respect to open access to the merged company's broadband facilities.

  • Regulation of the Merged Entity as a LEC or incumbent LEC. The Commission determines that, as the merged firm begins to provide telecommunications services, the systems offering such services will become subject to the requirements set forth in Section 251(a) of the Communications Act. To the extent the merged firm provides local exchange service, it will be subject to Section 251(b). The Commission rejects requests that AT&T-TCI be classified as a "comparable carrier" subject to the unbundling, resale, and other requirements of Section 251(c).

  • Program access. The Commission affirms that the merger will not shield AT&T-TCI from the program access rules. Liberty Media will be a wholly owned subsidiary of AT&T, and the merged company therefore will fall within the scope of the rules. The Commission declines to impose program access restrictions beyond those specified by the rules.

On October 22, 1998 and December 14, 1998, the Commission held en banc hearings on the merger.

Action by the Commission February 17, 1999, by Memorandum Opinion and Order (FCC 99-24). Chairman Kennard, Commissioners Ness and Powell, with Commissioner Furchtgott-Roth concurring in the result and Commissioner Tristani approving in part and dissenting in part. Chairman Kennard and Commissioners Furchtgott-Roth and Tristani issuing separate statements.

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News Media contact: Morgan Broman at (202) 418-2358.
Cable Services Bureau contact: Royce Dickens at (202) 418-7200
TTY: (202) 418-7172