"The EC will force the divestiture of Telewest because it's concerned that the cable company competes with BT in the UK. It's also concerned about the anti-competitive implications of the convergent telephone and broadcasting industries," said a City analyst. "But it's not a problem. Telewest is no must-have for AT&T."
The American phone company obtained its Telewest stake through its just- closing $57bn acquisition of Tele-Communications, the number two US cable provider. TCI is an investor in the UK operation.
In the medium term, both AT&T and BT have designs on the European cable television business, analysts say. But for now both are focused on getting their joint venture off the ground.
Announced last July, the joint venture will aim to provide low-cost voice, data, and video services to multinational customers conducting trans-Atlantic business. When concluded, it will fill the gap in BT's global Concert alliance, created when BT's bid to buy US telephone company MCI was trumped by WorldCom in November 1997.
London has indicated its approval. If, as expected, Brussels gives the green light next month or in April, attention will turn to the Federal Communications Commission in Washington.
The FCC is now reviewing the responses of AT&T and BT to comments about the joint venture offered by third parties, and, analysts say, is likely to announce its judgment this autumn.