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Time Warner delays telco unit IPO

The media and cable giant delays the planned initial public stock offering of its business telecommunications unit, citing market conditions.

Time Warner said today that it has delayed the planned initial public stock offering of its business telecommunications unit, Time Warner Telecom, citing market conditions.

As reported, the media, cable, and entertainment giant said in April that it planned to sell a minority interest in the telecom operation to the public. The deal was seen as another sign that the idea to provide a "one-stop shop" for telecommunications services--in phones, cable TV and Net access--was catching on.

Another deal supporting this strategy--AT&T's proposed buyout of Tele-Communications Incorporated--also may need to be renegotiated amid a fall in the telco's stock price following the June 24 announcement, analysts speculated last week. (Both companies say they remain committed to the deal.)

Time Warner Telecom is a competitive local exchange carrier--or CLEC--owned by Time Warner in partnership with MediaOne Group (formerly US West Media Group) and Advance/Newhouse. It operates throughout major metropolitan areas in the United States and caters primarily to medium- and large-sized businesses.

As part of today's announcement, Time Warner Telecom filed an amendment with the Securities and Exchange Commission to sell $400 million of senior notes due 2008--double the amount of a previous filing of $200 million. The notes are part of the IPO that was filed in April.

Morgan Stanley Dean Witter and Lehman Brothers were named as underwriters in connection with the offering.

At the time, analysts saw the offering as a way to bolster investor support for the jointly owned telco business. Time Warner is best known for its publishing, entertainment, and cable businesses.

So-called CLECs are meant to compete with the Baby Bells under industry deregulation. As Time Warner put it in its April filing: "The company believes that the 1996 [telecom reform] act and certain state regulatory initiatives provide increased opportunities in the telecommunications marketplace by opening all local markets to competition and by requiring [telecommunications carriers] to provide increased direct interconnection."

Reuters contributed to this report.