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AT & T tells FCC of good intentions

AT&T is seeking plenty of wiggle room to comply with the cable subscriber cap. Last week, the company told the FCC it would "take steps" to prevent its investments with cable programmers from running afoul of the government's 30% attribution rules.

By May 19, AT&T must take one of three steps to get under the cap as part of the FCC's approval of its acquisition of MediaOne Group. The dilemma was created because AT&T owns a 25% stake in Time Warner Entertainment. That investment pushes AT&T's subscribership share to 41%.

Besides eliminating ownership of Liberty Media, Rainbow Holdings and other programmers that sell shows to Time Warner franchises, the FCC said AT&T also could spin off a 25% stake in Time Warner Entertainment or sell other owned or affiliated cable systems.

AT&T had said it would spin off Liberty Media. Last week, it said it might also spin off Rainbow, inDemand and MediaOne-affiliated programmers but might instead take measures to convince the FCC that the businesses should no longer should be counted as AT&T-owned, including converting stakes into non-voting shares, putting them into a trust, or selling enough voting stock to get below the FCC's 5% trigger for attribution.

Consumer advocates said AT&T is trying to have it both ways. "I'm not sure this will be sufficient for the commission, and I'm sure it won't be sufficient for us," said Andrew Schwartzman, president of Media Access Project." FCC officials would not comment.