Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | CS Docket No. 99-251         |
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| Applications for Consent to the  | ) |                              |
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| Transfer of Control of Licenses  | * |                              |
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| Section 214 Authorizations from  | * |                              |
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| MediaOne Group, Inc.,            | * |                              |
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| AT&T Corp.                       | * |                              |
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**ORDER**

**Adopted: December 21, 2000 Released: December 21, 2000**

By the Commission:

1.  In this *Order*, we find that AT&T Corp. ("AT&T") has not complied
    with Ordering Clause paragraph 187 and Appendix B, Section (f)(1),
    of the *Merger Order* issued in this proceeding.[^1] The *Merger
    Order* required AT&T to submit, by December 15, 2000, a written
    document stating which one of the three compliance options it has
    elected to satisfy the *Merger Order*'s Video Condition.[^2]
    Although AT&T has filed a written document that purports to comply
    with this condition, we conclude that this submission does not
    satisfy our *Merger Order*.[^3]

2.  In the *Merger Order*, we granted AT&T 12 months from May 19, 2000
    to come into compliance with the Commission's horizontal ownership
    rules.[^4] In order to ensure that AT&T took timely steps towards
    compliance by the May 19, 2001 deadline, the *Merger Order* set
    forth a series of interim compliance deadlines. The *Order* requires
    AT&T to elect, within six months of the merger's closing, one of the
    three Video Condition compliance options and to satisfy the elected
    option by May 19, 2001. This first deadline would assure the
    Commission that AT&T was well on its way towards compliance.
    Ordering Clause paragraph 187, which establishes the deadline,
    required AT&T to file with the Cable Services Bureau a written
    document within six months after the merger's closing "stating which
    one of the compliance options specified in the Video Condition it
    has elected." This requirement is unambiguous. This ordering clause
    further provides that, after electing one of the three options,
    "AT&T shall complete its divestiture of the elected assets by May
    19, 2001."

3.  Ordering Clauses paragraphs 188 and 189 further make clear that the
    interim compliance deadlines require AT&T to follow through on its
    six-month election. Ordering Clause paragraph 188 states that if
    AT&T is not in compliance by the May 19, 2001 deadline, it "shall
    place into an irrevocable trust for the purpose of sale [the
    assets]{.underline} that it must divest in order to effectuate the
    Video Condition compliance option [it has elected pursuant to
    paragraph 187 above]{.underline}" (emphasis added). Ordering Clause
    paragraph 189 further states that, if AT&T is not in compliance by
    the May 19, 2001 deadline, AT&T must place the elected assets into a
    trust.

4.  We find that AT&T's December 15, 2000 and December 19, 2000 letters
    do not comply with the *Merger Order*'s requirement that AT&T
    unambiguously elect a single compliance option that it will satisfy
    by May 19, 2001.[^5] Instead, AT&T's December 15 and December 19
    letters state that AT&T intends to satisfy Video Condition
    Option (b) by divesting Liberty Media Group and AT&T's other video
    programming interests; however, the letters also state that, under
    certain circumstances, AT&T may decide to satisfy Video Condition
    Option (a) by divesting its interest in Time Warner Entertainment,
    LP ("TWE").[^6] AT&T has proffered a conditional election, rather
    than the single unambiguous election that the *Merger Order*
    requires.

5.  Reading the two letters together, we determine that it appears to be
    AT&T's intent to elect Option (a), the divestiture of TWE, and will
    treat AT&T's election as choosing that option only. The December 15,
    2000 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.[^7] In AT&T's December 19
    letter, AT&T states, "\[F\]or purposes of the election in the event
    AT&T is unable to comply with the Video Condition by May 19, 2001,
    AT&T has selected a single option, *i.e.*, to divest its TWE
    interest or to put that interest in an irrevocable trust for the
    purposes of sale."[^8] AT&T has represented that the TWE assets are
    the only assets it can commit to place in an irrevocable trust for
    sale as required by the Order. AT&T's December 19, 2000, letter
    states:

> . . . our ability to complete the Liberty transaction is dependent on
> our receipt of the tax rulings for which we have already applied. If
> we do not receive those rulings, AT&T will not have the right either
> to spin off Liberty or to place it in an irrevocable trust for
> purposes of sale. For this reason, it would not be proper for AT&T to
> designate this option as our "election" for purposes of the Order,
> because we cannot in good faith represent that our interest in Liberty
> could be placed in the trust required by the Order.

Without changing the terms of the original order, AT&T could only have
elected the TWE option, as of the date it was required to make the
choice. Therefore, for purposes of our enforcement of Ordering Clause
paragraph 187 of the *Order*, we determine that AT&T has elected Option
(a).[^9]

**ORDERING CLAUSES**

6.  Accordingly, IT IS ORDERED, pursuant to sections 4(i), 214, 303(r),
    and 310 of the Communications Act, as amended, that AT&T Corp. has
    elected Video Condition Option (a) pursuant to Ordering Clause
    paragraph 187 of the *Merger Order*.

7.  IT IS FURTHER ORDERED, pursuant to sections 4(i), 214, 303(r), and
    310 of the Communications Act, as amended, should AT&T seek to have
    the Commission consider a modification of this *Order* to allow it
    to elect Option (b), it must submit a written request by January 15,
    2001 with an appropriate showing as to why such a modification would
    serve the public interest.

8.  IT IS FURTHER ORDERED that, pursuant to sections 4(i), 214, 303(r),
    and 310 of the Communications Act, as amended, that the Emergency
    Motion for Expedited Declaratory Ruling and to Waive Procedural
    Rules filed by Consumers Union, Consumer Federation of America, and
    Media Access Project filed on December 18, 2000 in this proceeding
    IS GRANTED to the extent discussed herein and otherwise IS DISMISSED
    AS MOOT.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

[^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 ("*Merger Order*"), 15 FCC Rcd.
    9816 (2000).

[^2]: The *Order*'s "Video Condition" 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]: *See* Letter from James W. Cicconi, General Counsel, AT&T Corp.,
    to Deborah A. Lathen, Chief, FCC Cable Services Bureau dated Dec.
    15, 2000; Letter from James W. Cicconi, General Counsel, AT&T Corp.,
    to Deborah A. Lathen, Chief, FCC Cable Services Bureau dated Dec.
    19, 2000.

[^4]: *Merger Order*, 15 FCC Rcd. 9816 at ¶ 71. The rules went into
    effect on May 19, 2000. *Id.*

[^5]: We note that, in an Emergency Motion for Expedited Declaratory
    Ruling and to Waive Procedural Rules filed by Consumers Union,
    Consumer Federation of America, and Media Access Project ("CU") on
    December 18, 2000 in this proceeding, CU requested that the
    Commission issue a declaratory ruling finding that AT&T had not
    definitively specified which one of the three options it was
    electing. Given our finding in this *Order*, we grant the Emergency
    Motion to the extent discussed herein and dismiss the remainder as
    moot.

[^6]: *See* n. 3 *supra* for the three compliance options.

[^7]: December 15 letter at 2.

[^8]: December 19 letter at 2 n.2.

[^9]: Should AT&T seek to have the Commission consider a modification of
    this *Order* to allow it to elect Option (b), it must submit a
    written request by January 15, 2001 with an appropriate showing as
    to why such a modification would serve the public interest.