AT&T cuts deal to win MediaOne

LONG-DISTANCE telephone giant AT&T last night cut a deal with rival Comcast in their battle for the cable television company MediaOne, and will now go ahead with its $56.4bn (pounds 34.6bn) offer. After a frenzy of late manoeuvring, Comcast agreed to bless the deal in exchange for getting two million cable subscribers from the combined company for $9bn.

Media reports said Microsoft might invest about $5bn in AT&T in exchange for a commitment to use its Windows operating systems in the television set-top boxes AT&T will deploy in order to offer advanced interactive services. Microsoft declined to comment, as did AT&T. The proposed acquisition of MediaOne, in addition to AT&T's recent purchase of Tele-Communications Inc, will make AT&T the largest US telephone and cable television company.