Merger
In 1997 TCI merged with the Kearns-Tribune Corp., publisher of The Salt Lake Tribune, Utah's largest newspaper. Kearns-Tribune Corp. was a large holder of TCI stock.
On June 24, 1998, AT&T, the nation's largest provider of telephone service, announced a plan to buy TCI, second to Time Warner among cable operators with 13 million customers, for $32 billion in stock and $16 billion in assumed debt. This marked the first major merger between phone and cable since deregulation. The new company, to be called AT&T Consumer Services, planned to "significantly accelerate" efforts to offer digital telephone, data and video services as the companies combined the long distance, wireless and dial-up Internet service of AT&T with the cable, high-speed Internet and telecommunications services of TCI. For the first time, AT&T would be able to offer local telephone service. To do this, the company could have bought a Baby bell such as SBC Communications (which purchased AT&T in 2005 and took the AT&T name), but this would have meant regulatory problems. Liberty Media stockholders would receive separate tracking stock.
Federal regulators and the two companies' shareholders approved the merger February 17, 1999. By that time, the value of the stock portion of the deal had increased to $43.5 billion. The Federal Communications Commission did not require TCI to give other companies access to its cable lines, despite requests by America Online and others. TCI had made its cable lines capable of providing Internet access, and AT&T wanted those same lines to provide local phone service, which it was already doing in another agreement with Time Warner.
AT&T completed its acquisition March 9, 1999, and TCI became AT&T Broadband and Internet Services, the company's largest unit, with Hindery its chief executive. Malone moved over to Liberty Media, which remained a separate stock and included newer TCI businesses under the heading of TCI Ventures.
Read more about this topic: Tele-Communications Inc.