Exec sends message

AT&T taps new cable topper; may signal no sale

By JOHN DEMPSEY

AT&T may be signaling to Wall Street that its cable-system operation will not be sold -- by hiring the veteran cable operator Bill Schleyer as the new president and CEO.

Schleyer succeeds Dan Somers, who is retiring after falling under heavy criticism for alleged poor management of AT&T Broadband, the umbrella title of the cable operation, which is by far the largest multisystem cable operator (MSO) in the U.S., with 16.1 million subscribers.

Comcast Corp., the third-largest MSO in the U.S., is negotiating with AT&T to take over its cable operation. Other companies that have made overtures to AT&T Broadband include AOL Time Warner, Microsoft, Cox Communications and the Walt Disney Co.

But Schleyer, 50, "helped make Continental Cablevision one of the industry's best run and most innovative companies," said C. Michael Armstrong, chairman and CEO of AT&T, in a statement. Continental changed its name to Media One in the mid '90s and was taken over by AT&T in a $58 billion deal in 1999.

Schleyer is a principal in the Boston-based Pilot House Ventures, which invests in broadband and Internet industries. AT&T has also hired two of Schleyer's former associates, Ron Cooper and David Fellows.

Cooper, 44, president and chief operating officer of Relera, becomes chief operating officer of AT&T Broadband. Fellows, 49, like Schleyer a principal in Pilot House, becomes chief technology officer of AT&T Broadband.

One insider said AT&T would probably not have hired these executives if it was dead set on selling the broadband division. The company has made no bones about its dissatisfaction with the offers it has received so far, particularly the one from Comcast.

The hiring of Schleyer, Cooper and Fellows is "part of a larger effort to strengthen and enhance AT&T Broadband's senior-management team," said Armstrong, "as the company continues to evaluate strategic and financial alternatives for the business."