Labor Union Questions Armstrong's Role

A labor union representing 25,000 AT&T Corp. workers is questioning C.
Michael Armstrong's ongoing role as chairman and CEO when he is planning to
leave the company to become chairman of AT&T Comcast Corp. if that cable
merger is approved.

The Communications Workers of America raised questions about whether
Armstrong has conflicts of interest in a Jan. 6 letter to Securities and
Exchange Commission chairman Harvey Pitt.

'In light of the Enron [Corp.] collapse and subsequent high losses in their
stock positions, we feel the need to bring our concerns to your attention now,'
the CWA letter said, adding that many CWA workers are also AT&T

The two-page CWA letter argued that AT&T and the future AT&T Comcast
will be direct competitors. As a result, AT&T shareholders need to know
whether Armstrong is looking out for their best interests or the interests of
shareholders in AT&T Comcast.

'How can Mr. Armstrong be named chairman of AT&T Comcast and be allowed
to remain CEO of AT&T during the transition? This creates a clear conflict
of interest,' the CWA letter said.

'If allowed to hold both positions at the same time, what safeguards are
AT&T stockholders given to assure that Mr. Armstrong keeps their best
interests a priority in his structuring of the deal?' the letter continued.

A CWA spokeswoman said the labor union had not received a reply from

AT&T spokesman Jim McGann said the CWA's letter was not an issue because
the AT&T board adopted safeguards in January.

For example, the AT&T board must review all material modifications or
additions to the AT&T Comcast merger agreement and to existing agreements
among AT&T's current business units.

The AT&T board, McGann added, is to ensure that deals among AT&T
business units are performed at arm's length and contain commercially reasonable

In December, AT&T agreed to merge its cable-system company with Comcast
Corp. in a $72 billion deal that would create the world's largest cable company,
with at least 22 million video subscribers.

The merger requires the approval of the Federal Communications Commission and
the Department of Justice or the Federal Trade Commission. The merger has not
been submitted to the FCC for approval.

Because of the manner in which the deal is structured -- a Comcast takeover
that leaves AT&T shareholders with a majority of AT&T Comcast voting
stock -- both AT&T and Comcast need to transfer local franchise

A Comcast source said as many as 3,000 franchise agreements could be