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.
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.