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
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
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.