Comcast Touts $48Bln AT&T Purchase

NEW YORK -- Thirty-eight years after buying a small Mississippi cable television provider, Ralph Roberts sat silently before the media cameras and let his son do the talking about a deal that, if completed, would turn the family company into the top industry player.

But after Brian Roberts finished answering questions from reporters, it was his father's turn to speak up about the capstone of his career -- buying AT&T's cable business, the country's largest, for $48 billion.

"This is a remarkable story of American business," Ralph Roberts said in a scratchy voice. "And I don't think it could happen in any other country."

It was almost unbelievable, he said, that he and his son were able to turn Comcast into the country's third-largest cable operator -- and put the company in a position where AT&T would even consider doing business with its smaller rival.

The younger Roberts and AT&T chairman and chief executive C. Michael Armstrong touted the merger as a way to provide television, Internet and telephone service to a fifth of America's households at competitive prices.

"We can give them greater choice at very competitive prices," Armstrong said in an interview. "This just couldn't be better for the consumer."

Not everyone was cheering. Consumer advocates said they doubt prices will go down and fear that the deal puts too much control in the hands of a single company.

The opposing views are sure to dominate debate over whether regulators in Washington should approve the deal to create a company with 22.3 million subscribers -- almost double the size of the closest rival, AOL Time Warner.

Jeff Chester, executive director of the Center for Digital Democracy, said the merger will give one company leverage over too many consumers' communications needs.

"Americans should be very worried about how this new combination will affect what they pay each month for cable and Internet service," Chester said.

More than five years ago, before AT&T went on a buying binge of cable companies, he said, they forecast that phone service would be widely available through the same fiber-optic cable, and it hasn't come true yet.

Armstrong said AT&T's business of bundling telephone, Internet and cable service together has met projections and now has 1 million customers.

"We are the low-cost producer of that service, and we can charge less and still have a good return on our investment," he said.

Analysts said the future will bring progress, but perhaps more gradually than the industry's cheerleaders see it.

"I remember when we were going to get all of our services through our phone jack as late as 1993, but that died a pretty quick death," said Laura Behrens, a media analyst with the Gartner G2 unit of research group Gartner Inc.

It may take years, but the merger will eventually allow consumers more seamless access to various services through cable connections, she said.

"Whether that is a price that consumers find attractive is a fairly major question," Behrens said.

On average, basic cable television service costs about $38 and a high-speed Internet connection $40 to $50 -- not including any installation or start-up fees or the costs of equipment like modems.

If regulators approve the AT&T-Comcast deal, the merger is expected to be completed at the end of next year. Armstrong will become chairman of AT&T Comcast and Brian Roberts will get the chief executive post.

They said they would share responsibility for running the company, but that Roberts would have control over day-to-day management.

Under the deal, AT&T Comcast will assume $25 billion in debt, including $5 billion of AT&T Broadband debt held by Microsoft that will be converted into shares of the new company.