FCC quashes consumers on AT&T issue


Citing a court order throwing out the government's cable ownership limits,
the FCC Tuesday rejected consumer groups' demand that AT&T be forced to
comply with divestiture orders imposed as a condition of the company's
acquisition of MediaOne Group.

Consumers Union, the Consumer Federation of America and
Media Access Project argued the conditions were justified not only by the
government's cable ownership limits but also by the FCC's authority to impose
merger conditions deemed in the public interest.

But the FCC said that even a public interest justification for the divestiture order is "sufficiently linked" to the ownership limits to suspend the selloff mandate.

In June 2000, the FCC ordered AT&T to either sell its partial interest in Time Warner's programming unit or sell enough cable systems to get below the 30% cap on one company's share of U.S. pay TV subscribers.

The FCC is now revising its ownership rules to comply with a federal appeals court order and in March suspended AT&T's forfeiture obligation.

In the meantime, the consumer groups in August asked the U.S. Supreme Court to reverse the lower court order. The justices have not yet decided whether to hear the case.
- Bill McConnell