December 18, 2000

James W. Cicconi

General Counsel

AT&T Corp.

1120 20^th^ Street, N.W.

Suite 1000

Washington, D.C. 20036

> **Re: In the Matter of Applications for Consent to the Transfer of
> Control of Licenses and Section 214 Authorizations from MediaOne
> Group, [Inc. to AT&T Corp., CS Docket No. 99-251 ]{.underline}**

Dear Mr. Cicconi:

I am in receipt of your December 15, 2000 letter filed pursuant to
Paragraph 71 and Appendix B, Section 18(f)(1) of the Commission's
*Order* in this proceeding.[^1] After reviewing your letter, we find
that it is not clear whether the letter is in compliance with Ordering
Clause paragraph 187 and Appendix B, Section 18(f)(1) of the *Order*.
The purpose of my letter is to seek further clarification from AT&T
regarding its election pursuant to these provisions of the *Order*.

Ordering Clause paragraph 187 required AT&T to file with the Cable
Services Bureau a written document within six months after the merger's
closure "stating which one of the compliance options specified in the
Video Condition it has elected."[^2] This ordering clause further
provides that "AT&T shall complete its divestiture of the elected assets
by May 19, 2001."

The December 15, 2000 letter does not appear to make a single election,
as Ordering Clause paragraph 187 requires. Although the letter states
that "AT&T intends to comply with the Commission's Order by spinning off
Liberty Media Group and making non-attributable its interests in other
entities from which Time Warner Entertainment, L.P. ("TWE") purchases
video programming, by May 19, 2001," the letter then states that, under
certain circumstances, AT&T may decline to divest Liberty. Because this
is not an irrevocable commitment to divest Liberty, this statement does
not comply with paragraph 187's requirement that AT&T divest the assets
it has elected in its six month letter.

The letter's clearest commitment appears to be its certification that
AT&T will comply with the *Order* by divesting TWE or placing its TWE
interest in an irrevocable trust for purposes of sale in the event that
it declines to divest Liberty. Thus, it appears that your December 15,
2000 letter means that AT&T has elected to divest TWE as the means for
its compliance with the *Order*. If our understanding of your election
is correct, and by March 20, 2001, AT&T believes that it will not have
divested TWE by May 19, 2001, then AT&T must, pursuant to paragraph 189
of the *Order*, file a document describing the irrevocable trust
arrangement that it will establish for the sale of its TWE interest.[^3]

Please advise immediately if this comports with your understanding of
AT&T's election. Please clarify AT&T's election immediately.

Sincerely,

Deborah A. Lathen

Chief

Cable Services Bureau

[^1]: *In the Matter of Applications for Consent to the Transfer of
    Control of Licenses and Section 214 Authorizations from MediaOne
    Group, Inc., Transferor, To AT&T Corp., Transferee*, CS Docket No.
    99-251, Memorandum Opinion and Order ("*Order*"), 15 FCC Rcd. 9816
    (2000).

[^2]: The *Order* requires AT&T, by May 19,2001, to either (a) divest
    its interests in TWE, (b) terminate its involvement in TWE's video
    programming activities (pursuant to the limited partnership
    exemption and the officers/directors attribution waiver provisions
    of the cable ownership attribution rules, 47 C.F.R. § 76.503 n.2),
    or (c) divest its interests in other cable systems, such that it
    will have attributable ownership interests in cable systems serving
    no more than 30% of MVPD subscribers nationwide. *See* Ordering
    Clause paragraph 186.

[^3]: After AT&T makes its December 15 election, Ordering Clause
    paragraph 189 requires that, by March 19, 2001, AT&T file another
    written document with the Cable Services Bureau stating whether AT&T
    would be in compliance by the divestiture deadline and, if not,
    describing an irrevocable trust arrangement for the sale of the
    assets that AT&T had elected on December 15.