Billions and billions served: "AT&T-TCI deal could cut costs, expand services," said the Denver Post in a headline announcing last week's monster merger. It was a modest little prediction in keeping with the breathless coverage so far afforded the deal, which of course is the latest step toward all U.S. corporate entities blending into one amoebic blob that will soon be able to expand only through asexual reproduction. The predicted marriage of Internet technology with residential phone service--plus a direct uplink to government black helicopters--may indeed revolutionize the way the average dipstick orders out for pizza. But naturally, its most immediate impact will be on the bank account of TCI chief executive officer John Malone, the financial genius whom vice president Al Gore once called a corporate "Darth Vader" and who will now have enough money to build his own personal death ray--or secure an unlimited supply of Viagra.
"I've hired the smartest son of a bitch I have ever met," cable cowboy Bob Magness told friends when he recruited Malone--who's already being dubbed "Pa Bell" by the Wall Street Journal--to TCI in 1973. And Malone's haul from the new merger does nothing to contradict either of the conclusions rendered by that assessment. According to Bloomberg Business News, his net worth will soar by an estimated $4.4 billion as a result of the deal, based on his TCI stock holdings--holdings, you may recall, that Malone went to great lengths to protect during last year's messy public spat with Magness's widow and sons. That brief bloodbath was touched off when Magness's boys, Kim and Gary, sued Malone and estate executor Donne Fisher, claiming that estate executors Fisher and University of Denver chancellor Daniel Ritchie were so "afraid of pissing off John Malone" that they'd cut him a sweetheart deal on Bob's TCI shares. Responded a longtime company employee: "There's a lot of people around here who are really pissed off at those two boys." Among the other comments spurting out was Malone's aside to the TCI board that, whenever he kicks off, his heirs might prove to be as nasty as Magness's boys, a casual bit of intimidation that convinced the company to pay him $150 million for the right to buy his stock when he departs for the great satellite in the sky.
The whopping $8.5 billion premium that AT&T is paying for TCI stock--a staggering roll of the dice that may prompt its shareholders to rue the day AT&T boss C. Michael Armstrong hopped into bed with Malone--will temporarily inflate the net worth of TCI stockholders. But there are plenty of questions about the art of this deal. For instance, one of the chief claims made by both companies is that the merger absolutely, positively won't lead to layoffs. TCI even bought local employees lunch last Wednesday while assuring them they wouldn't be taken out and shot. Yet both companies have a history--and, in AT&T's case, an apparent future--of mass firings. It was only two years ago that TCI laid off 2,500 employees in a bid to make itself more attractive to Wall Street. And AT&T has said it plans to give 18,000 employees the ax as part of its own restructuring effort--in part, perhaps, to make room for the $16 billion in TCI debt it agreed to strap on as part of the deal.
There's also the question of just long it will be before anyone actually sees the space-age technology Malone and Armstrong have been crowing about (their plan: Your TV will be your telephone, your personal computer, your personal home-shopping center and your sex partner). After all, the company that's supposed to help AT&T provide state-of-the-art home shopping is the same one that just last year was having its hide blistered by local municipalities for waffling on a promise to install new fiber-optic lines. Instead, in several cases, TCI announced that to save money it was opting for digital-compression technology that allows it to increase the number of channels without installing a state-of-the-art delivery system.
Still, who wants to be a nag when the honeymoon isn't even over yet? There really is something sexy about consummating such a transaction, and both Malone and TCI president Leo Hindery oozed excitement at a New York press conference last week. Hindery, who only days before was weathering the glare of a New York Times story that strongly suggested he has fabricated hardships he suffered as a child (among other things, he's claimed that he left home at the age of thirteen and joined the merchant marine--a claim the family members he allegedly left behind dispute), now opined, "You date and date and date and one day you decide to get married." The ruddy Malone asked a throng of reporters, "Would you like to order Viagra while you're watching your favorite entertainment show?"
Get down with your bad self, Pa. As for us, we don't need the stuff when we're watching the Spice Channel.
I confess! Nathan "Gabby" Thill, the skinhead accused of gunning down unarmed African immigrant Oumar Dia last November after asking him if he "was ready to die," proved to be a real blabbermouth. Not only did Gabby tell police detectives that he'd done it, he also fessed up on camera to Channel 7 reporter Julie Hayden and then went on to unburden himself to yet another TV reporter. Now, though, Thill's had a change of heart about bragging on his bad deeds--or at least his public defenders have. Five--count 'em, five--PDs are racing against time to avert a death sentence for Thill, who's charged with killing Dia and shooting Good Samaritan Jeannie Vanvelkinburgh while the two sat at a downtown bus stop. And last week, lead counsel David Wymore took the first step toward keeping Thill alive: trying to get the televised confession to Hayden, the most damning evidence against him, ruled inadmissible. Wymore's theory: that the reporters to whom Thill spilled his guts were somehow doing the bidding of law enforcement rather than just trying to get a scoop.
"I'm not sure I understand ultimately where he's going," says Bruce Jones, the attorney for Channel 7, whose videotapes and reporter notes Wymore has subpoenaed. "What they've hinted at during the hearing was that somehow Thill wanted an attorney and the cops weren't providing him with an attorney, and that that in some way motivated them to get him access to the media so he'd confess to the media. But that doesn't make a whole lot of sense, because it wasn't like he was only willing to confess to the media. He confessed at length to the cops."
This isn't the first time a defendant has forwarded an argument about cop-reporter collusion to save his hide. In one case that went to the Colorado Supreme Court, the late Channel 9 photographer Peter Peelgrane was accused of acting as an agent for the police because he'd agreed to fly cops over an area of suspected drug activity in return for dibs on the story. Regardless of the questions that raised about journalistic ethics--nothing like getting busted in the name of Nielsen ratings--the court ruled that Peelgrane couldn't be forced to testify because he'd been acting as a news person, not a government agent.
Assuming Wymore pursues his theory that Thill's right to counsel was prejudiced by the cops' insatiable need to get him on the ten o'clock news, the case may raise legal issues similar to those in the Peelgrane matter. For now, though, ethics can wait: The unavailability of police witnesses prompted judge Federico Alvarez to continue the hearing until August. Until we bleat again, Gabby.
Wet and wild: After months of behind-the-scenes wrangling, the Denver Water Board is finally poised to vote July 7 on the steamy issue of "tap fees." Those are the charges assessed every time someone hooks up to the water system--in most cases, a developer who's just built a new residential home. The water department says the tap fees are intended to make growth pay for itself; developers, naturally, can't stand them and have long advocated that they be reduced or eliminated.
The water board was originally scheduled to vote June 2 on a staff proposal to raise the fees, which haven't gone up in eleven years. But after some last-minute pressure from the Home Builders Association of Metropolitan Denver and its strange bedfellows in the local environmental movement, Denver mayor Wellington Webb put on some last-minute moves of his own and persuaded the board to postpone its vote.
The mayor apparently was receptive to arguments by the homebuilders and environmentalists that tap fees--which developers currently pay themselves and then roll into the cost of any new home--might discourage conservation because the up-front charges not only pay the cost of growth but also subsidize lower rates for consumers, many of them water hogs. In a May 26 letter to Webb, Homebuilders president John Kurowski made a political pitch to the mayor, noting "this issue provides you a wonderful opportunity to turn your advocacy for affordable housing into action." In fact, Kurowski suggested, rather than raising tap fees for developers, the city should consider reducing them--and making up the difference by raising rates for people who use large amounts of water. (That letter was also accompanied by a touching sticky-note message from Homebuilders spokesman Steve Wilson to city planning director Jennifer Moulton: "Jennifer M. Thanks so much for your help so far. Hang in there--we really do have a strategy and a way to win this one.")
But though the Homebuilders had a strategy, a friend in the planning office and even the support of groups like Clean Water Action--"I think they want to keep their cash cow forever," says CWA director Carmi McClean of the water board--it looks like they're going to lose this time around. Not long after the Homebuilders letter arrived, former state attorney general J.D. MacFarlane and Frank Sullivan, a Denver Democratic district captain from Park Hill, sent Webb a message of their own asking for a meeting and suggesting the mayor stick with the recommendations of water-department staffers. The staff is pushing a proposal to raise tap fees by about 5 percent, which means that charges within Denver would go from $2,870 to about $3,000, and those in the suburbs--where developers and homebuyers have always paid more--would rise from $4,010 to $4,200.
"Frank and I were convinced he was going along with the homebuilders," says MacFarlane. But after some persuasive conversation, the Webb-appointed board now appears ready to approve the staff's proposed increase on Tuesday. The environmentalists apparently will get a consolation prize: a sliding scale that will charge more for larger lots, which typically use more water.
And the homebuilders? They'll essentially be left high and dry.
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