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Jump to navigation Jump to go looking Tele-Communications, Inc.Traded asNASDAQ: TCOMAIndustryCable televisionSuccessorAT&T BroadbandFounded1968Defunct1999FatePurchased by means of AT&T Corporation for broadband Internet services and productsCable television methods sold to Cablevision and ComcastHeadquartersDenver, Colorado, U.S.Key folksJohn Malone
Tele-Communications, Inc. (TCI) used to be a cable tv provider in the United States, and for most of its history was once managed through Bob Magness and John Malone.
The corporate was once began in 1958 in Bozeman, Montana as Western Microwave, Inc. and Community Television, Inc., two companies with commonplace possession. The companies merged in 1968 and operations moved to Denver, taking the name Tele-Communications Inc. It used to be the largest cable operator in the United States at one time.
After going public in 1970, the company grew all of a sudden, and turned into the highest cable provider within the United States. After a failed merger attempt with Bell Atlantic in 1994, it used to be purchased in 1999 by way of AT&T, whose cable television property have been later acquired through Charter Communications and then Comcast Corporation.
After graduating from Southwestern Oklahoma State University, Bob Magness used to be a cotton seed salesman and cattle rancher. In 1956, he met two males who had been stranded and needed a experience. Learning that they sought after to build a group antenna machine in Paducah, Texas, he determined to raise the cash for the same gadget in Memphis, Texas. He offered his farm animals, took out a loan on his home and borrowed 00 from his father. His spouse did the place of work work whilst Bob publish the wires himself.
Two years later Magness sold the machine and used to be looking for a method to invest the sales proceeds. Another cable pioneer, Bill Daniels, instructed him a couple of community antenna gadget in Bozeman, Montana. The Kearns-Tribune Corp., publisher of The Salt Lake Tribune, which owned a cable gadget in Reno, Nevada, began relaying signals via commonplace service microwave from Salt Lake City in 1956. In 1958 it turned into a partner with Magness in organising a partnership for cable TV in Montana. George C. Hatch and Brian Glasmann have been additionally partners in the firms known as Community Television Inc. and Western Microwave Inc. The Magness circle of relatives moved to Bozeman. Six systems have been built, serving a complete of 12,000 properties.
In 1962, Magness purchased Collier Electric Company, which had subscribers in Wyoming, Colorado, and Nebraska, bringing the full choice of subscribers to 18,000. Magness later moved to Scottsbluff, Nebraska.
Over time, Magness received extra systems however remained in Bozeman. By 1965, Daniels told him the corporations needed to be situated in a bigger city. Salt Lake City and Denver, Colorado, have been each thought to be. In 1968, the firms moved to Denver and became Tele-Communications Inc.
Tele-Communications Inc. went public in 1970. At the time, it was once the 10th largest cable corporate in the United States. By 1972, with 100,000 subscribers, Magness wanted someone with more industry knowledge to run the operation. He decided on John Malone, president of Jerrold Electronics, a division of General Instrument. Malone took on the bankers who wanted to name of their loans, and successfully stored the corporate from bankruptcy. Magness made Malone CEO however remained as chairman. By 1981, Malone had made TCI the most important cable corporate in the United States.
In 1982, Malone employed Peter Barton, who called himself the corporate's "Jimmy Olsen" as a result of he just did no matter was needed, contemporary from Harvard Business School. Barton went directly to grow to be president of TCI's Cable Value Network (later QVC) in 1986, and in 1991, president of TCI derivative Liberty Media. Barton had a playful side and even kept toys in his Liberty Media place of job, and a gorilla costume to constitute his status as "second banana" to Malone. Yet he had a name as "a shrewd and sometimes vicious negotiator".
In 1995, TCI got the cable tv belongings of Viacom.First Merger
In May 1991 United Artists introduced a merger take care of their biggest shareholder TCI (nowLiberty Media) to form the largest cable operator in the USA, a deal valued at 2.5m for the 50% now not already owned via TCI. TCI and US West introduced a three way partnership, and in 1992 the three way partnership company became Telewest Communications. By June the deal used to be authorized. Every week afterward June Eight the deal used to be finalized with TCI obtaining the remaining 46% of United Artists, to permit complete keep an eye on.Flextech
During the autumn of 1993 talks had been also held with Flextech (a British television programming provider). Under the original terms of the proposed deal, Flextech would gain TCI's European programming trade in trade for shares. By January the deal was once whole with TCI  got 40-60% of Flextech whilst Flextech got 100% of UK Bravo, 25% of UK Gold, and 31% of UK Living and 25% of the Children's Channel which increased its proportion in that channel.Mile High Cablevision
In Spring of 1995 TCI Purchased Mile-Hi Cablevision, the CATV Provider for the city of Denver, Colorado & town of Glendale, Colorado Mile-Hi Cablevision were in trade since 1983. And previous to the merger, TCI Served most effective the suburbs across the town & county of Denver.Merger with Liberty Media
In Spring 1993, Bell Atlantic started having a look at merger companions, including cable firms. TCI and Liberty Media could be got for .8 billion in stock and assumption of .Eight billion in debt. And billion in Liberty properties may most likely be added to the deal. Numerous regulatory concerns made the deal difficult; regional phone companies may no longer offer lengthy distance carrier or transmit satellite tv for pc tv services and products corresponding to Discovery Channel. TCI would also have to sell operations in Bell Atlantic territory. As for antitrust concerns, Bell Atlantic argued that competing telephone services may well be introduced where TCI had cable systems, and video services may compete with TCI. Vice President Al Gore supported the theory of bettering the country's infrastructure, and the industry neighborhood took his commentary to imply management approval of the merger.
The billion deal, based on a $Fifty four according to proportion price for Bell Atlantic stock, would were the largest in American telecommunications history, the resulting corporate serving one in four cable TV consumers. But it fell apart for lots of causes, together with declining stock prices for both corporations. Malone, who would have made over 1 billion, sought after extra stocks of Bell Atlantic when its price dropped under , which Ray Smith refused to do because it could reduce the worth of current shares. The two firms additionally had different cultures. Bell Atlantic paid dividends and was once used to being regulated, while TCI tended to spend money on the business somewhat than pay dividends. And thus ended a billion undertaking to expand the ideas superhighway, even though different mergers promised to put the mission back heading in the right direction, with a extra native emphasis relatively than attempting a nationwide machine improve.
The Bell Atlantic deal additionally fell sufferer to new federal regulations that reduced cable bills up to 16 %, costing TCI 0 million over two years. Higher spending coupled with decrease money receipts made TCI less attractive to traders, and the stock price dropped to a proportion, part what professionals believed the corporate was worth. Bill Nygren of Harris Associates, known for making the most of TCI's Liberty Media, said TCI may make a comeback, and Michael Mahoney of GT Capital anticipated the proposed deregulation of the cable and phone industries to extend cable corporate revenues. Both expected TCI to learn, particularly since TCI owned 30 % of a joint venture that integrated Sprint and 10 cable firms being able to serve 40 % of American homes. Cable and get in touch with companies may just each be offering each and every other's products and services, reaping benefits each corporations and shoppers with product bundling. TCI had plans to improve to virtual cable and offer extra channels and services and products. Satellite TV suppliers could be competing to provide digital carrier, however TCI owned a share of Primestar, and predicted a 28 p.c share of the satellite tv for pc market through the top of 1995.
In Fall 1995, Time Warner agreed to replace $Eight billion in inventory for Eighty two % of Turner Broadcasting System. TCI would business its 21 % pastime in Turner for the 3rd biggest stake in Time Warner, or 9 %. Since the resulting corporations would have Forty percent of cable families, sufficient to motive anti-trust worry, TCI agreed to let Time Warner's Gerald Levin constitute TCI. This didn't satisfy federal regulators. Malone ended the 15 percent discount on Turner programming that will have lasted twenty years, and Time Warner had to pay million to hide TCI's taxes due.
Magness died in November 1996, with a 26 % percentage of the company. No one believed this meant the tip of Malone's tenure as head of TCI, despite the fact that Malone called Magness his "mentor" and "father figure". Still, TCI had billion in debt and unfavourable money float of $four hundred million for 1996. Malone believed he may flip the corporate round. This supposed upper rates for patrons as well as programmers. Malone even succeeded in getting Fox News Channel to pay
[content]hundred million for his firms so as to add the community. At the similar time, cost slicing needed to happen, and many of the cable shoppers were in rural areas with outdated apparatus and limited choices. Upgrading to fiber optic provider, which could be used for Internet and telephone provider, could be cost-effective simplest in city spaces. Satellite TV, whilst not a big risk yet, represented a conceivable drawback one day. The good news: satellite companies may not offer native channels or phone provider, and person dishes served just one TV.
The new applied sciences had two advantages for TCI. First, customers would wish set-top bins, which TCI already had ordered from General Instrument. Another merit was once generation evolved by way of a brand new corporate known as Imedia which might permit 4 times as many channels to be delivered the usage of existing generation, even in spaces no longer getting fiber-optic provider.
On the other hand, digital carrier had its disadvantages. Customers who didn't even need a box would still lose channels so that digital channels might be added. And General Instrument only reluctantly agreed to permit more than one suppliers to bring TCI's prices down.
In 1997 TCI bought ten of its cable systems in NJ and NY to Cablevision.
TCI progressed its fortunes, hiring Leo Hindery as president and making Malone chairman and CEO. Still, it used to be thought to be an organization likely to be taken over. TCI was once acquired via AT&T in 1999 and in 2002, Comcast acquired the remainder of TCI's cable tv techniques.
In 1997 TCI merged with the Kearns-Tribune Corp., writer of The Salt Lake Tribune, Utah's greatest newspaper. Kearns-Tribune Corp. was once a large holder of TCI inventory.
On June 24, 1998, AT&T, the country's largest provider of telephone carrier, announced a plan to shop for TCI, 2d to Time Warner among cable operators with 13 million shoppers, for billion in inventory and billion in assumed debt. This marked the first main merger between telephone and cable since deregulation. The new company, to be called AT&T Consumer Services, deliberate to "significantly accelerate" efforts to provide virtual phone, information and video services and products as the corporations blended the lengthy distance, wi-fi and dial-up Internet carrier of AT&T with the cable, high-speed Internet and telecommunications products and services of TCI. For the primary time, AT&T would be able to be offering local telephone provider. To do that, the corporate could have purchased a Baby bell equivalent to SBC Communications (which bought AT&T in 2005 and took the AT&T identify), but this may have meant regulatory problems. Liberty Media stockholders would receive separate monitoring inventory.
Federal regulators and the 2 firms' shareholders licensed the merger February 17, 1999. By that time, the price of the inventory portion of the deal had increased to .Five billion. The Federal Communications Commission didn't require TCI to give different corporations get admission to to its cable strains, in spite of requests through America Online and others. TCI had made its cable lines in a position to offering Internet get admission to, and AT&T sought after those same strains to supply local telephone carrier, which it was already doing in every other settlement with Time Warner.
AT&T completed its acquisition March 9, 1999, and TCI become AT&T Broadband and Internet Services, the company's largest unit, with Hindery its leader govt. Malone moved over to Liberty Media, which remained a separate inventory and integrated newer TCI companies below the heading of TCI Ventures.