Microsoft may block AT&T-AOL Broadband

  07/31/2001 9:59:29 AM MDT Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

Reports are surfacing that Microsoft wants to block the AT&T-AOL Broadband merger
  AOL Time Warner has proposed the plan to purchase AT&T Broadband from AT&T. This proposal came after the AT&T board of directors rejected the Comcast Buyout proposal of $58 Billion last week.

  A Purchase of AT&T Broadband by AOL Time Warner would give AOL/TW a direct competitor of Microsoft projected access to 40% of the high-speed internet access customer base in the United States. Obviously, Microsoft doesn't want this.

  Although Microsoft has said it has no intention of buying AT&T Broadband itself, the software giant is willing to put its considerable financial resources behind an all-out effort to encourage other companies to step into the breach and put offers in for the broadband service, according to a report based on sources in The Financial Times newspaper.

  AOL Time Warner, Microsoft and AT&T did not comment on the news.

  AT&T and Comcast had been in buyout talks for the broadband business. Comcast made these talks and the proposal public 2 weeks ago, but Comcast's $58 billion was rejected by AT&T's board last week. By Wednesday, The Wall Street Journal was reporting that AOL Time Warner was in talks to merge its cable operations with AT&T Broadband.

  AT&T reported that as of June 30, its broadband division had 848,000 telephony customers, 1.3 million high-speed data customers, and 3.1 million digital video customers for a total of 5.3 million service subscribers.

  AOL Time Warner and AT&T reaching an agreement could give AOL Time Warner 40% of the U.S. high-speed cable market share, with about 29 million subscribers. Obviously Microsoft doesn't want this.

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