AT&T lightens load with cable sale

AT&T Broadband moved a step closer to reducing its debt today with the sale of its cable systems in Georgia, Illinois, Iowa and Missouri to Mediacom Communications for about $2.2 billion in cash.

The deal helps AT&T pay down its debt and focus on bigger metropolitan markets.

“We have been under a process by which we have been involved in clustering our systems--focusing on certain areas where we have clusters--which happen to be major metropolitan areas of the country,” said Eileen Connolly, vice president of financial communications for AT&T. “As a result, we have engaged in both swaps with companies as well as some sale of systems that do not fit into the geographic clusters.”

The cable systems sold are located in Albany, Columbus, Tifton and Valdosta, Ga.; Charleston, Carbondale, Effingham, Marion, Moline and Rock Island, Ill.; Ames, Cedar Rapids, Clinton, Davenport, Des Moines, Dubuque, Fort Dodge, Iowa City, Mason City and Waterloo, Iowa; and Columbia, Jefferson City and Springfield, Mo.

The deal positions Mediacom as the No. 8 U.S. cable company, doubling its size with the addition of 840,000 basic cable subscribers to about 1.6 million subscribers.

“We’re an opportunistic acquirer of cable systems,” said John Pascarelli, senior vice president of marketing and consumer services at Mediacom. “When they’re available, and when they make sense, we look to purchase them. That’s our strategy, and that’s how we’ve grown over the last five years.”

The transaction is expected to close by second or third quarter 2001.