Time Warner, AT&T To Partner in Internet Venture

One day after winning preliminary approval for its purchase of cable operator Tele-Communications Inc., AT&T Corp. is reportedly in discussions with Time Warner Inc. about a possible Internet alliance.

According to published reports, the two companies will align in a joint venture that would allow AT&T to use Time Warner's cable systems to provide Internet access. The venture could be announced by mid-January.

AT&T would foot the bill for most of the upgrades to Time Warner's network that would be necessary to support high-speed Internet access and voice transmission.

The reports said AT&T is also looking to seal similar ventures with other cable firms. Discussions with those firms could begin soon after the Time Warner deal is announced.

For AT&T, its purchase of TCI and partnerships with its competitors give the phone giant a much quicker route to offering high-speed data since cable lines go directly into the home and don't require cooperation from regional Bell telephone companies.

The reports come one day after AT&T and TCI told city officials in Portland, Ore., they don't plan to abide by a city ordinance requiring them to open TCI's cable system to other Internet providers.

AT&T said it will comply with all provisions of an ordinance approving the transfer of TCI's cable system in Portland to AT&T with the exception of a requirement that other Internet providers be able to access TCI's cable network.

An AT&T spokesman said the company is balking against the provision because it believes the requirement is unlawful. AT&T and TCI maintain city governments have no authority to set rules using the open-access provision. The companies say that authority lies solely with the Federal Communications Commission or Congress.