VIII. The Transaction

Pursuant to the Agreement, MediaOne Group will merge into Meteor, a wholly owned subsidiary of AT&T, and MediaOne Group will cease to exist. The shareholders of MediaOne Group will receive 0.95 shares of AT&T Common Stock and $30.85 in cash for each MediaOne Group share. These shareholders also have the option of converting their MediaOne Group shares into cash.

Meteor will be the surviving company of the merger, continuing to be wholly owned by AT&T and succeeding to all the assets, liabilities, and business of MediaOne Group. The authorizations and licenses held by MediaOne Group subsidiaries will continue to be held by those subsidiaries, and controlled indirectly by AT&T. Similarly, MediaOne of Colorado will continue to hold its 19% stock interest in TWT through its subsidiary MediaOne TWE. Hence, Applicants seek a determination that Commission approval is not necessary for AT&T to acquire indirectly MediaOne Group's minority interest in TWT and, in the alternative, approval of this transfer.

After the proposed transfer of control is approved, the California affiliates will continue to offer their local exchange service customers a choice of long distance carriers in compliance with their obligations under § 251(b)(3) of the Telecommunications Act of 1996.

Applicants represent that the transfer of control will result in a change in the ultimate owners of MediaOne Telecom and other MediaOne Group subsidiaries. However, it will not involve any immediate change in the manner in which MediaOne Telecom, AT&T-C, TCG San Francisco, TCG Los Angeles, TCG San Diego, TCI Telephony, and AT&T Wireless (collectively the California affiliates) provide service to California customers. Following the proposed transfer of control, the California affiliates will continue to be led by a team of qualified telecommunications managers and will continue to provide services pursuant to tariffs on file with this Commission.

Applicants further represent that the proposed transaction furthers every element of the Commission's public interest review. This is because AT&T's acquisition of MediaOne Group is financially feasible and will provide increased competition in the California telecommunications market.

Applicants conclude that AT&T is qualified to operate the combined businesses and that the merger offers a broad range of additional public benefits, as identified in the joint application.