PHILADELPHIA Comcast completes acquisition of AT & amp;T cable

The newly merged cable company is adding video on demand service.
PHILADELPHIA (AP) -- Comcast Corp., started four decades ago with a 1,200-subscriber cable television system in Mississippi, completed the acquisition of AT & amp;T's cable division Monday for about $29 billion in stock to become the nation's largest cable operator.
Comcast had been the country's third-largest cable company with 8.5 million customers. Acquiring AT & amp;T Broadband, the largest cable operator, created Comcast Corp. with about 22 million subscribers, nearly twice as many as second-place AOL Time Warner Inc.
Comcast, which also assumed more than $24 billion in AT & amp;T debt as part of the transaction, has systems in 17 of the nation's 20 largest cities, controlling 29 percent of the market nationally.
"Our focus now turns to bringing all of our cable systems up to the Comcast standard, quickly moving to deploy digital cable and data to meet the growing demand for these products," said Brian Roberts, now chief executive officer of Comcast.
Roberts said the company already had more than 150 executives in place at former AT & amp;T Broadband systems around the country launching a $2 billion, two-year project to upgrade more than 60,000 miles of cable circuits so customers could get digital cable service and high-speed Internet access via cable modems.
More services
The companies "can accomplish more together than we could alone," said C. Michael Armstrong, retiring chairman and chief executive officer of AT & amp;T, who became chairman of the new Comcast Corp. He said the new company would be capable of "bringing more services to more people more quickly."
The acquisition won't mean immediate changes for former Comcast or AT & amp;T Broadband customers, Roberts said in a recent interview.
"It's a gradual change the customers see, but hopefully very quickly we'll get the rebuild complete and roll out the new products," he said. "It's already begun. Our desire is to accelerate the rebuilding."
Roberts used a television in his office to demonstrate video-on-demand service being introduced in Philadelphia, which lets customers start movies, concerts or daily programming whenever they want to watch, with pause, rewind and fast-forward capabilities. "This is the kind of product that customers are going to see in the next 24 months in every one of the AT & amp;T markets," he said.
Counting on new services
Comcast is banking on selling new services to increase revenue and attack its $30 billion in total debt after the acquisition.
Roberts said the company expects to reduce the debt to $25 billion in the first 18 months and resume a positive cash flow by 2004. When announced in December, the deal was valued at $47 billion in stock plus debt. That declined by about 35 percent as Comcast shares sagged along with the rest of the market over the past year.