TW want to buy AT&T

[Psycho Fox]

I heard that the following compaines are at each others throat to get AT&T:

Time Warner
Microsoft
Rogers Communications

Ok, time out AT&T is a money pit right now, well more like a abyse. They are bleeding to death. Now MS and Rogers can very well absorb this but TW? Not a chance it will bring their stock down quite a bit.

Hmmm maybe this is the time I been waiting for maybe this is where TW will seriously fumble and I can get a nice piece of voting stock cheap.

[Vin]

I doubt AOLTW will buy At&T Broadband because of the scrunity they'd face in Washington trying to get the merger approved. Microsoft, well, with them violating Anti-Trust laws, that may not sit well with the FTC if they tried to merge with AT&T Broadband.

[Sveven Dvorking]

As much as I don't want Microsoft broken up, they shouldn't expand or merge. That would be all the more reason for them to break up.

Time Warner merged with AOL earlier this year, so they don't need another merger.

I don't even know what Rogers Communications is, so I can't comment there.

[Psycho Fox]

Originally posted by Sveven Dvorking
As much as I don't want Microsoft broken up, they shouldn't expand or merge. That would be all the more reason for them to break up.

Time Warner merged with AOL earlier this year, so they don't need another merger.

I don't even know what Rogers Communications is, so I can't comment there.

I'm not a huge M$ fan infact I kinda don't like them but hey I don't care if they buy up AT&T or not it is a money pit even M$ couldn't pick it up without taking some hit.

As for TW since when did they do anything remotley intelligent thus I still think they just might go for it.

Rogers is a Media tycoon in Canada and already had a minor invested intrest in AT&T. There is not enough money in the world to pay of their debt but that doesn't matter banks love em since Rogers looks after them so his credit rating is always spotless.

[Anthonynotes]

Got a link to an article or something online about this possible buyout of AT&T? Sounds like an idle rumor to me...

If said comment is true, it doesn't seem likely, even with the deregulation-happy environment in Washington right now, that AOL-TW would be able to purchase a telephone/telecommunications company like that without suffering some sort of major obstacles. Microsoft seems more plausible (can't think of anything standing in the way legally, even with their legal problems) legally, but with their legal problems, it'd be foolish to provoke those who'd want to break them up (which wouldn't bother me much admittedly :-) by getting exponentially *bigger*. Plus, what would Microsoft gain from such a purchase?

Most likely merger path at this time would probably be a repeat of what happened in radio over the last decade (huge increase in consolidation/all the stations sounding alike) to the area of TV stations (and one company owning both a TV station *and* a newspaper in the same city)...and of course, there's nothing stopping AOL-TW/Microsoft/Rogers from investing in AT&T (vs. buying it out)...

-B.

[James Harvey]

There's no way AOLTW could buy AT & T. It is a huge hole and would suck AOLTW right down with it. Geeze, I never even knew AT & T was doing bad.

[Maxie Zeus]

And Comcast has actually put a bid on the table for AT&T Broadband.

AOL-TWX is not considering swallowing AT&T Broadband whole. The plan, as I understand it, would be to pool the AT&T/TWX cable systems into a new public company, only 45% or so of which would be owned by AOL, with the rest being distributed to AT&T Broadband's current shareholders. There would thus be no financial penalty, only the management nightmare of integrating the two companies.

[The Mad Hatter]

Lookee what I found on the news wires at work today. It sheds a lot of light as to why AOL wants AT&T Broadband... the answer will probably surprise you, especially Psycho Fox. Here it is:

A sweet arrangement for AOL
Scripps Howard News Service
Must credit The Industry Standard
By CORY JOHNSON
The Industry Standard
AOL Time Warner’s interest in merging cable operations with AT&T’s is based on an unusual principle. Not market dominance — though AT&T’s 13.7 million cable television subscribers would more than double AOL’s cable customer base. Not operating efficiencies — though Time Warner could easily improve AT&T Broadband’s paltry 23.4 percent estimated operating margin. And not high-speed Internet access, though AOL would gladly add the 1.3 million high-speed subscribers of AT&T affiliate Excite(at) Home.
Those are compelling reasons, but there’s another motive, one that reveals the ways of the cable industry: The deal would keep AOL from making a profit. A merger of AOL’s cable operations with AT&T Broadband, at a cost of more than $60 billion, would create years of losses from interest and depreciation.
For AOL, nothing could be sweeter.
How’s that? The business of publicly traded cable companies is like few others. The key to their financial leverage is that they never turn a profit, so they never have to pay taxes. The problem, an odd problem indeed, is that cable subscriptions generate loads of revenue — AOL Time Warner got $1.5 billion in cable revenue last quarter alone, 17 percent of the company’s total revenue. With that kind of inflow, the only way cable companies can avoid profits is to spend huge sums.
The early days of cable made this easy. As cable rolled into new neighborhoods, firms had massive expenses. But when the system was turned on, it started generating cash. So the companies built new systems, avoiding profits — and taxes. And as the cable market matured, two new trends took hold: system upgrades and a wave of mergers, which saw big cable companies borrowing money to buy smaller competitors. The resulting debt created a new, tax-deductible expense.
Big debt, of course, isn’t necessarily a bad thing, any more than a big home mortgage is — as long as you make the payments. So the health of a cable business depends on generating cash while generating losses.
“The cable industry has been historically cash-flow-driven,” says Raymond James analyst Phil Leigh. “It’s in their interest to reduce their taxes.”
In this light, with almost $20 billion in long-term debt and interest of $26.4 million a week, AOL Time Warner is a great success. If Bugs Bunny were around today, he’d probably say his parent company was in hock up to its armpits, bub.
Last week’s $1.64 billion acquisition of British publisher IPC Group by AOL adds another cash-flow-rich business — and another big cost. Magazines are the perfect cash-flow business: Subscribers pay a year before the product is even made. According to influential Goldman Sachs analyst Anthony Noto, magazine subscriptions already account for 3.6 percent of AOL revenues.
If AOL gets its way, the irony won’t escape information-economy cognoscenti: AOL Time Warner, the mother of all Internet companies, goes to great lengths to generate costs and avoid profit, while other Internet companies are now forced to seek profit at all costs.
(Distributed by Scripps Howard News Service, http://www.shns.com.)

[Maxie Zeus]

Originally posted by The Mad Hatter

Those are compelling reasons, but there’s another motive, one that reveals the ways of the cable industry: The deal would keep AOL from making a profit. A merger of AOL’s cable operations with AT&T Broadband, at a cost of more than $60 billion, would create years of losses from interest and depreciation.
For AOL, nothing could be sweeter.

I always knew the Internet was based in Lewis Carroll's Looking Glass world.

Thanks for the article, MH.

[Anthonynotes]

Yeesh....typical corporate "logic" at work, I see....

And what's this about "if Bugs were around today"?! Of *course* he's alive! Toons can't be killed! Uh, except by "Dip", I guess... ;-)

-B.
Notes that *his* city's cable company's "Time Warner Cable" (or rather, the non-suburban parts of the city)...

[Nftnat]

Originally posted by Brainatra
Yeesh....typical corporate "logic" at work, I see....

And what's this about "if Bugs were around today"?! Of *course* he's alive! Toons can't be killed! Uh, except by "Dip", I guess... ;-)

-B.
Notes that *his* city's cable company's "Time Warner Cable" (or rather, the non-suburban parts of the city)...

Well, there are those --- I've encountered such on Termite Terrace & the ng; one Greg Duffell comes to mind --- who believe that the Looney Tunes are dead. They're usually the same ones who despise all '90's Warner toons. I guess the source in that article is of that persuasion. Pobody's nerfect.

[Printo]

TW does a lot of stupid things. Phone companies will soon be obsolete. Cable companies are the future. You can connect to the internet better with cable b/c it can transfer faster b/c of larger capacity(no need to dialup, instant connection). Phone companies will be replaced by cable companies possibly in the next 20 years. Instead of normal phones we could be talking through cameras through cable lines. TW will learn fro mthis mistake if they do decide to buy at&t. haha i laugh at their misfortune.

[Psycho Fox]

Originally posted by Printo
TW does a lot of stupid things. Phone companies will soon be obsolete. Cable companies are the future. You can connect to the internet better with cable b/c it can transfer faster b/c of larger capacity(no need to dialup, instant connection). Phone companies will be replaced by cable companies possibly in the next 20 years. Instead of normal phones we could be talking through cameras through cable lines. TW will learn fro mthis mistake if they do decide to buy at&t. haha i laugh at their misfortune.

Wee your sort of right.... Video phones will be a nitch since most of the time you don't really want to see the other person since I know I lot of people that have a phone in the bedroom & the bathroom.

But you are right about one thing see I work at Rogers and they are all ready to sell cable phones... regular phones that plug into your cable line the only obsticle is the goverment.

[DR. BELCH]

I'm going to refrain from thinking how interesting a video phone would make calling one of those 1-900 numbers... ...though if you're phoning up your lover, and you know them well enough to get a little wild courtesy of Ma Bell...well...that could be a fun evening. Next best thing for long-distance relationships or couples who just can't get away from work/school to be together....

I don't know how bad AT&T is...but maybe Time-Warner and Microsoft have some heavy-duty scheme to overhaul it. Rip it to the ground and rebuild it from scratch, if it's so bad. Maybe a variant of Cartman's scheme in the theme park episode of South Park...put up a fuss, keep people out, thus generating desire in the masses to be a member. Psychology turns around dying communications giant, film at 11.

Bugs isn't dead. Remember "Fields of Honey"? Old toons may grow old and forgotten and collect dust, but they never really die. I'm hoping Chuck Jones will step up to direct one last big Bugs short before he passes on....

[Maxie Zeus]

Originally posted by Printo
TW does a lot of stupid things. Phone companies will soon be obsolete. Cable companies are the future. You can connect to the internet better with cable b/c it can transfer faster b/c of larger capacity(no need to dialup, instant connection). Phone companies will be replaced by cable companies possibly in the next 20 years. Instead of normal phones we could be talking through cameras through cable lines. TW will learn fro mthis mistake if they do decide to buy at&t. haha i laugh at their misfortune.

I believe that TW is aiming only to buy AT&T Broadband, which is the cable division (formerly TCI and USWest/MediaOne), and NOT the entire phone company.

[Anthonynotes]

Originally posted by Printo
TW does a lot of stupid things. Phone companies will soon be obsolete. Cable companies are the future. You can connect to the internet better with cable b/c it can transfer faster b/c of larger capacity(no need to dialup, instant connection). Phone companies will be replaced by cable companies possibly in the next 20 years. Instead of normal phones we could be talking through cameras through cable lines. TW will learn fro mthis mistake if they do decide to buy at&t. haha i laugh at their misfortune.

I'm pretty sure that Ma Bell/the Baby Bells will stick around (in some form or other) over the next 20 years....while high-speed internet access is certainly the wave of the future, I doubt there'll be the end of phone companies in that time (video phones have been predicted since the sixties, and still aren't in common use, and it took touchtone phones a few decades to fully replace rotary phones). Besides, it'd just be replacing one monopolistic company (Ameritech, in my part of the country's case---and they've been under scrutiny by the state over their service quality) with *another* monopolistic company (your likely one-and-only cable company, whose service isn't necessarily much better)....

Either way, I think that AT&T will be here for the long haul, even if they're having problems now...

-B.

[Psycho Fox]

Originally posted by Brainatra


I'm pretty sure that Ma Bell/the Baby Bells will stick around (in some form or other) over the next 20 years....while high-speed internet access is certainly the wave of the future, I doubt there'll be the end of phone companies in that time (video phones have been predicted since the sixties, and still aren't in common use, and it took touchtone phones a few decades to fully replace rotary phones). Besides, it'd just be replacing one monopolistic company (Ameritech, in my part of the country's case---and they've been under scrutiny by the state over their service quality) with *another* monopolistic company (your likely one-and-only cable company, whose service isn't necessarily much better)....

Well I agree with the video phone, cable companies already have working modles of cable phones all that is needed is the goverment to give the green light. Cable companess bost that they can give cheaper prices for long distance since they have less overhead for local.

[Anthonynotes]

>>Well I agree with the video phone, cable companies already have working modles of cable phones all that is needed is the goverment to give the green light. Cable companess bost that they can give cheaper prices for long distance since they have less overhead for local.<<<

So they claim...though I've seen the "we'll give cheap/cheaper service" argument before, only for prices go up (as with cable recently)...

I'm pretty sure that any such videophone service (whether offered by the cable company or the phone company---regular phones aren't obsolete yet by any means, and hence neither are the phone companies) would either be quite expensive at first and/or have some sort of premium price attached to it (as with the fees/prices of cable TV as it is right now), along with the fact that unlike cable modem service, there might not be a discernable advantage to video phone service for awhile, making it slow to catch on. And as I stated before, my own personal feeling that phone and cable companies should probably keep their services somewhat seperate from each other (there's been enough mergers already)...

-B.
Who assumes there'd be an "audio-only" option on any such video phone to make it truly worthwhile----people don't need to see what I look like at 7 AM...

[Psycho Fox]

Originally posted by Brainatra
>>Well I agree with the video phone, cable companies already have working modles of cable phones all that is needed is the goverment to give the green light. Cable companess bost that they can give cheaper prices for long distance since they have less overhead for local.<<<

So they claim...though I've seen the "we'll give cheap/cheaper service" argument before, only for prices go up (as with cable recently)...

Well they can give cheaper service then the phone company can ever give since their infrastructure is already being payed for by cable TV and Internet thus they don't have to charge you as much since the cost is spread accross 3 markets plus your are paing for one line instead of one phone line a one cable line so for me I would like to see cable phone come out.

I'm pretty sure that any such videophone service (whether offered by the cable company or the phone company---regular phones aren't obsolete yet by any means, and hence neither are the phone companies) would either be quite expensive at first and/or have some sort of premium price attached to it (as with the fees/prices of cable TV as it is right now), along with the fact that unlike cable modem service, there might not be a discernable advantage to video phone service for awhile, making it slow to catch on. .

I agree as of yet Cable companies are more intrested in regular cable phones since video phones would choke their systems

And as I stated before, my own personal feeling that phone and cable companies should probably keep their services somewhat seperate from each other (there's been enough mergers already)..

Yhea but if it means I pay less or they have the money to develop TV on demand then they should go for it

[The Mad Hatter]

Here we go again.

Well they can give cheaper service then the phone company can ever give since their infrastructure is already being payed for by cable TV and Internet thus they don't have to charge you as much since the cost is spread accross 3 markets plus your are paing for one line instead of one phone line a one cable line so for me I would like to see cable phone come out.

Brainatra isn't denying that such services are cheaper for whichever amalgamated company will result from combining this service. What he is doubting, rightly so, is whether these companies will pass on the profits to the average consumer. Remember, these companies don't exist to serve the public... they exist to make as much money for themselves as possible through their services. And since cable deregulations, which supposedly have reduced costs for the cable companies, yet cable consumers haven't seen lower prices. Thinking that reduced company costs will automatically result in reduced consumer costs, based on history, is a bit naiive.