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Armstrong's vision

Three suitors for AT&T Broadband are well-known: Comcast, Cox, AOL Time Warner. But there's a fourth: AT&T Chairman Michael Armstrong. And he may have the most to prove.

One of the big questions as AT&T's directors review bids for the cable unit is whether Armstrong still has the confidence of his board. Among the options the directors were slated to consider over the past weekend is whether, as he has asserted, the company would be better off retaining the cable systems and keeping the value from expected growth instead of splitting it with the shareholders of one of the bidders.

Armstrong's credibility with Wall Street has been substantially reduced by a series of missteps, including a now worthless $5 billion string of investments in Excite@Home and an embarrassing plunge in AT&T Broadband's cash flow. What is unknown is Armstrong's credibility with the board.

"This will be a big test," said the CEO of one media company not involved in the contest. "If there's not an offer that's clearly great, will the board take it rather than let Armstrong keep it?"

It's not clear that any of the offers are great. Auction numbers usually leak out quickly, but senior executives at all the companies have been openly scrounging for details about the competing bids.

"We put our bids into the black box, but we don't see what else is in there," said Comcast President Steve Burke. "Frankly, I don't think any of us really knows what the other bids are."

Industry executives said Microsoft has essentially offered to back a winning Cox, Comcast or Armstrong with a cash injection, merely to keep AOL Time Warner from getting more cable subscribers. But no solid details have trickled out.

An executive at one bidder—who first asked for any details of rival bids—took the silence as good news for Comcast, whose $58 billion offer sparked Armstrong's months-long hunt for rival offers. "If anything were blowing the doors off," the executive said, "AT&T would be leaking it to gin up the auction."