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AT & T is paying $1.8B for Boston

To nobody's surprise, AT & T Corp. agreed to buy Cablevision System's Boston operation in a transaction worth $1.8 billion. The deal is the final stage in Cablevision's contraction into the New York City market, selling all of its systems outside that metro area.

The company wants to focus on its ballooning New York presence. AT & T will get systems serving 357,850 subscribers in Boston and eastern Massachusetts, a package that will mesh with a suburban-Boston cluster AT & T is getting as part of its planned takeover of MediaOne Group. In turn, AT & T will give Cablevision 125,500 subscribers in the northern New York City suburbs, $878 million worth of AT & T stock and $284 million in cash. Goldman Sachs media analyst Barry Kaplan estimates that the deal is worth a fat 21 times 2000 cash flow and $5,000 per subscriber.