AT&T, AOL discussing cable deal

Aiming to fend off Comcast Corp.'s advances for its broadband business, AT&T Corp. is talking with AOL Time Warner Inc. about a friendly deal to merge the two companies' cable-TV operations, The Wall Street Journal reports.

Talks between the nation's largest cable companies come two weeks after Comcast made an unsolicited $40 billion stock-swap bid for AT&T Broadband. AT&T rejected that offer last week, saying it wasn't rich enough.

Shortly after Comcast disclosed its bid, the Journal reports, AOL and AT&T started talks. AOL
co-chief operating officer Richard Parsons is representing the media giant
with AT&T honcho C. Michael Armstrong.

Gerald Levin, AOL's CEO, has also reportedly met with Armstrong at least