AT&T, Comcast Commit To Choice Of ISPs

The two companies will negotiate commercial agreements with unaffiliated ISPs to give consumers that choice, according to documents filed with the Federal Communications Commission, which is reviewing whether to approve Comcast's bid to acquire AT&T Broadband.

"AT&T Comcast is fully committed to negotiating mutually beneficial service agreements with Internet service providers so that its cable customers will have a choice of ISPs," the companies said.

"Each applicant is actively (and independently) negotiating to reach commercial agreements with unaffiliated ISPs," they said. AT&T Broadband recently inked such a deal with EarthLink , which also offers service on Time Warner systems in certain markets.

The documents were made public on Friday as the agency seeks comment on whether the deal is in the public interest. AT&T is already the biggest U.S. cable provider and would grow to a company with more than 22 million customers.

Choice of Internet service providers has been a hot-button issue in the cable industry as consumer groups and unaffiliated ISPs seek access to the cable pipeline which can be used for high-speed Internet service.

As part of America Online's acquisition of cable giant Time Warner in 2001, the companies were required by antitrust enforcers to offer consumers a choice of Internet providers via their cable systems.

The FCC is already embroiled in an intense debate over what rules apply to high-speed Internet service via cable lines. The agency recently declared the service would be subject to few regulations, which is being challenged by consumer groups and rival ISPs, including EarthLink.

Nonetheless, the FCC is weighing whether to require cable operators to provide consumers a choice of ISPs.

The number of subscribers to high-speed Internet service via cable rose more than 12 percent to 7.2 million in the fourth quarter of 2001 despite the economic slowdown, according to a cable trade group.

In addition to offering customers such a choice, AT&T and Comcast argued that their combination will speed the deployment of high-speed Internet service as well as other new digital television and telephone services without any downsides.

AT&T and Comcast said it will be able to upgrade cable systems more quickly because of the economies of scale and scope as well as cost savings from the merger.

The companies also said they would be able to speed the roll out of telephone service via their cable systems, providing additional competition in local telephone markets.

In addition to obtaining approval from the FCC, antitrust enforcers must also sign off on the deal. Under its terms, Comcast will pay about $47 billion in stock, plus the assumption of about $20 billion in debt.

REUTERS

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