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By Tony Hallett, 7 December 1998 17:03

NEWS The EC dished out both good and bad news to AT&T late last Friday. The US telco had its $48bn merger with cable company TCI approved, but the executive arm of the EU has ruled that further investigation is needed into AT&T pooling its non-domestic operations with BT. Commenting on the TCI ruling, AT&T senior vice president, government affairs and federal policy, Jim Cicconi, said: "We believe the merger will bring significant benefits to consumers in the US, such as a real choice for local telephone service." However approval from the US Justice Department, Federal Communications Commission and other authorities may prove more problematic. The EC noted the effects of the merger in Europe will be "marginal", but in the US there is already controversy surrounding the opening up of TCI's network to other companies. AT&T's international link-up with BT will now face an investigation likely to last until next spring. Opponents of the deal have argued the new unit - which has yet to be named - will control too much trans-Atlantic traffic. The EC said it will examine "the effects of the venture on several telecommunications markets and in particular the UK". A likely outcome would be for AT&T to stop serving the UK market. AT&T and BT already look set to put their weight behind Viag Interkom in Germany, the partly BT-backed competitor to Deutsche Telekom.