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Press
Release Contact:
Wednesday, November 15,
2000
Gene Kimmelman/David Butler
202/462-6262
Consumers
Union's Washington, DC Office
WASHINGTON, D.C. -- Gene Kimmelman, Co-Director
of Consumers Union's Washington D.C. office, made the following
statement today regarding AT&T's decision to spin off its
cable-programming affiliate Liberty Media:
"We are pleased to see a separation of
AT&T's cable monopoly wires from Liberty Media's cable
programming, given concerns about AT&T's ability to undercut
competition from independent programmers.
"However, if AT&T uses this transaction to
comply with the FCC's cable ownership limit, it will be taking
advantage of a loophole that the FCC should never have created.
"When the FCC was considering the merger of
AT&T and MediaOne, the regulators gave AT&T the option of
selling Liberty Media as a way to comply with the cap on cable
ownership. Consumers Union vigorously opposed this option because
Liberty Media is a not a cable provider, but a programmer. Selling
Liberty Media does not resolve the fundamental concerns about
AT&T's level of ownership in the cable industry.
"We are pleased that AT&T is selling
Liberty Media, but our concerns about excessive control of cable
wires will only be resolved if AT&T sells its interests in Time
Warner Entertainment (TWE). If allowed to keep its 25 percent stake
in TWE, AT&T will have substantial ownership in cable wires
serving about half of the homes across the U.S.
"We asked the FCC to disallow the Liberty Media
loophole during its original consideration of the MediaOne merger,
and last week, we filed a petition* with the FCC to plug the Liberty
Media loophole through reconsideration of the AT&T-MediaOne
merger and its consideration of the AOL-Time Warner merger. We
believe the FCC loophole is inconsistent with its legal mandate under
the 1992 Cable Act, and we will ask federal courts to prevent the FCC
from letting AT&T take advantage of the loophole.
"The FCC should go back to the drawing board
and require AT&T to sell its stake in TWE in order to prevent
ownership concentration that would thwart competition in the cable TV
and high-speed Internet markets."
Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers
