AT&T Broadband Still Considering Offers

NEW YORK – AT&T Broadband said talks about selling its operations are ongoing, but no decision has been reached.

The company, the nation's biggest cable television operator, met this weekend to discuss bids for its broadband operations.

"We're going back to discuss with all interested parties," AT&T spokeswoman Eileen M. Connolly said Sunday. She said AT&T hopes to have a decision on the future of the cable unit by the end of the year.

Three companies are believed to have submitted bids for Denver-based AT&T Broadband, including AOL Time Warner Inc., Philadelphia-based Comcast Corp. and Cox Communications Inc., sources told The Associated Press.

Calls left with all three companies Sunday were not immediately returned.

Microsoft was also considering increasing its stake in AT&T Broadband, a separate source close to the matter said last week. But it was also possible that the software giant would participate in a bid by Comcast or Cox in return for a stake, the source said, also on condition of anonymity.

AT&T could still decide against selling AT&T Broadband and go forward with an earlier plan to spin off the division as a separate company. The company has about 13.7 million cable subscribers, including 3.2 million who use its digital video services.

The bidding process started after Comcast, the country's No. 3 cable operator, mounted a $41 billion hostile bid in July for AT&T Broadband.

A decision to sell to AOL Time Warner, the nation's second largest cable company, would likely face heavy scrutiny by federal regulators and politicians wary about a combined company with about 28.9 million subscribers. By some estimates, that would represent 40 percent of the market.

The Comcast bid would create a colossal cable operator with 23.7 million subscribers, dwarfing AOL's Time Warner Cable, which has 12.8 million subscribers. While regulatory scrutiny is inevitable, the combination would mean a company with less than 40 percent of the market that would probably be approved in Washington, D.C., observers say.

The Supreme Court on Monday refused to consider reinstating government restrictions on the number of subscribers that cable companies can have.

The decision rejected arguments by consumer groups who fear the possibility of a cable monopoly. The Bush administration asked justices to turn down the case because federal regulators are working on a new set of rules to address monopoly concerns.