Still hungry, AOL? Back in July, Comcast's unsolicited $41 billion bid for AT&T Broadband put Ma Bell's cable unit in play and lit a fire under the telco's board to sell or spin off the division.
Over the weekend, the media reported that two other offers are ripening: one from the mighty big - but still, apparently, growing - AOL Time Warner, and according to the Wall Street Journal, perhaps another from Cox Communications. Most outlets cited executives close to the action, but the Financial Times and CNET tapped cable pioneer and "media investor" John Malone as a source for the news.
The Journal reported that an AOL-Ma Bell deal would add AT&T's 13.7 million cable customers to Time Warner Cable's 12.7 million, and create a Comcast-stomping top dog way out in front of the No. 3 company's 8.5 million. And since AT&T showed it still knows how to say no by dissing Comcast, AOL could make the deal as sweet as possible by taking only 40 percent of the unit. It just wants to use the pipes and the eyeballs on the other end of them; AT&T can keep the votes.
In days of yore, when the feds worried that mergers threatened competition, one might have expected the engagement of the country's two top cable providers to wake up a few bureaucrats at the FCC or FTC. And in a nostalgic nod to those days, the Wall Street Journal, Financial Times and Associated Press all warned that such a deal would face intense scrutiny. But writing in the New York Times, Andrew Ross Sorkin and Geraldine Fabrikant checked their calendars and pointed out that AOL's proposal was "precipitated, in part, by the Bush administration's decision last week to drop demands for the breakup of Microsoft, potentially improving the prospect that regulators would approve an AOL-AT&T Broadband deal." No one looked to the European Union as a check on this all-American deal.
If AT&T's directors like the details of a bid by AOL, we can expect a fair amount of hand-wringing from the minority-voting members of the Federal Communications Commission, and some sky-is-falling testimony from perennial AOL nemesis Walt Disney Co. – and perhaps even from Microsoft, if the antitrust trial's penalty phase is far enough into the past.
On the other hand, the Journal's Rebecca Blumenstein and Martin Peers suggested that AT&T Chairman C. Michael Armstrong could be more interested in making a deal with Cox, partly because that could attract less criticism from regulators. Cox could even team up with Disney or Microsoft, the Journal scribes speculated, since none of those companies want to see AOL get its mitts on AT&T's cable. In that scenario, scratch the protests from Redmond and Burbank, and watch instead for Steve Case to drive up to Capitol Hill to warn about the dangers of big media mergers.
AOL Time Warner Makes Offer for ATT's Cable-TV Division
TheStandard.com
AOL Time Warner Said to Be Pursuing ATT's Cable Unit
New York Times
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ATT has at least two bids for broadband unit (AP)
SiliconValley.com
AOL Time Warner proposes ATT Broadband deal
Financial Times
AOL Makes Offer for ATT Broadband; Cox May Be Considering Bid of Its Own
The Wall Street Journal
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Reports: AOL bids for ATT Broadband
CNET
AOL Seeks Big Stake In ATT Cable Unit
Washington Post
