NEW YORK-AT&T Corp. is rumored to be at an advanced stage in negotiations to acquire Teleport Communications Group Inc., the first and largest competitive local exchange carrier in the country.
AT&T and Teleport, both headquartered in New York, have declined comment on the speculation, which has been reported by various print and broadcast news media. GTE Corp. also has been mentioned as a possible, although less likely, suitor for Teleport. In fact, GTE, the largest local telephone company in the nation, also has been mentioned as a merger partner for AT&T.
By early last week, AT&T implied concurrence with rumors it had earlier refused comment on its possible purchase of Teleport. In addition to Teleport, AT&T said it also is in talks with WinStar Communications Inc. and McLeod USA, both of which would give it access to local customers. But none of these potential investments is imminent, AT&T said.
Merger talks between AT&T and SBC Communications Inc., another Baby Bell, languished earlier this year after Reed Hundt, then Federal Communications Commission chairman, raised antitrust concerns about the combination.
Like other telecommunications carriers, AT&T is seeking to provide a broader array of services, including local wireline telephony. The Teleport acquisition, which could cost $10 billion, would be AT&T’s first big move into the local phone business since the breakup of Ma Bell’s monopoly in 1983. It also would be the first clear sign of the company’s strategy under C. Michael Armstrong, its new chief executive.
Although Teleport serves primarily business customers in 58 domestic markets, AT&T might still gain access to residential customers if it could forge a relationship with Teleport’s cable television owners, analysts said.
Collectively, three cable television companies own nearly 67 percent of Teleport, which is located in the New York City borough of Staten Island. The remaining shares are publicly held.
