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February 17, 1999

Statement of William E. Kennard
Chairman of the Federal Communications Commission

The Commission today approved the AT&T/TCI merger. Although the Justice Department proceeding is not yet complete and the company has not yet obtained all relevant franchise approvals, I am cautiously optimistic that, once these other entities conclude their reviews, the American people will benefit from this merger. That's why I voted for it.

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. 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. Congress specifically envisioned the provision of local telephone service over the cable television infrastructure, and this merger will directly promote that goal on a widespread scale.

I am especially pleased by the commitment of AT&T Chairman Michael Armstrong that AT&T will offer service uniformly in all neighborhoods in every city it serves, and that it will pursue every opportunity to bring the most advanced communications services and equipment to our inner cities as well as to our nation's most rural and remote areas.

My optimism about this merger, however, is tempered by caution. We need to remind ourselves that mergers by themselves do not bring competition. Investment and deployment of resources, including facilities, bring competition. Combining companies does not expand consumer choices. Building alternative pathways and exploiting new technologies does.

The merger of AT&T and TCI may be an end in itself for the companies' shareholders, but that is of no consequence to the FCC. Our job is to advance consumers' welfare. For this reason, to the Commission, the merger is not an end, but at most a beginning endash the beginning of a competitive telecommunications marketplace where Americans have the choice from which to select the best services right for them.

During our review of this merger, a number of parties raised questions regarding access to cable networks by Internet Service Providers (ISP). While these concerns are important, they are not unique or specific to this merger. The development and deployment of high-speed, broadband Internet access is one of the most important issues facing us today. It is the foundation of our future economic growth and national strength. It is an issue that I take very seriously. However, given the early stage of deployment of cable's high speed Internet access services, it would be imprudent to act now. In the meantime, we are relying on AT&T's commitment that subscribers will have direct access to the content and on-line service providers of their choice. We will continue to monitor these developments to see how the market develops and how these new high-speed services are benefiting consumers.

At this nascent stage in the development of the market, one should not presume to have a regulatory cure for every anticipated marketplace ailment. We must allow the marketplace to evolve.

It is my hope that through this combination the parties will work to tear down the boundaries that have needlessly separated telecommunications technologies and will focus just as intently on bringing all Americans the advanced telecommunications services that the world has to offer.

- FCC -