FCC signals tentative blessing for AT&T-TCI union

The head of the Federal Communications Commission Wednesday morning indicated he is looking favorably on AT&T's proposed acquisition of cable giant TeleCommunications, Inc. (TCI).

"If AT&T and TCI make a strong commitment to bring residential consumers more choice in local telephone and high-speed Internet access services, then this proposed merger is eminently thinkable," said FCC Chairman William Kennard in a written statement.

Kennard's stance is welcome news for AT&T, whose relationship with Kennard has deteriorated in recent weeks. Kennard specifically blamed AT&T for the recent spat over new user surcharges to pay for expanded universal service programs such as Internet access at schools and libraries.

That was followed by an indirect accusation against AT&T by President Clinton, who said that "some businesses" were trying to kill the school Internet subsidy.

Kennard's statement is also especially notable given its careful wording. The term "thinkable" has become a key buzzword in Washington, D.C. to indicate the political viability of large corporate mergers.

Former FCC Chairman Reed Hundt last year effectively killed a developing merger between AT&T and regional Bell operating company SBC Communications, Inc. when he publicly called it "unthinkable."

Contact Senior Editor David Rohde.

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