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Liberty spinoff on track
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December 22, 2000: 1:00 p.m. ET
Shares of media and technology jump as AT&T insists it will pursue spinoff
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NEW YORK (CNNfn) - Shares of Liberty Media Group rose sharply in morning trading Friday as investors shrugged off concerns that a new U.S. Federal Communications Commission order could scuttle AT&T Corp.'s plans to spin off its fast-growing media and technology operation.
Liberty Media (LMG.A: Research, Estimates) shares climbed as high as $14.13 Friday morning before settling in at $13.31, up $1.50 or 13 percent, shortly after noon.
The surge comes just one day after the FCC ordered AT&T (T: Research, Estimates) to divest of its 25 percent stake in Time Warner Entertainment (TWE) -- a limited partnership that houses most of Time Warner Corp.'s (TWX: Research, Estimates) movie, cable and television production assets -- in order to comply with regulatory conditions placed on its $54 billion acquisition of MediaOne Group Inc. earlier this year. (Time Warner is the parent company of CNNfn.)
In a filing made with the FCC last week, however, AT&T said it planned to use the spinoff of Liberty Media – a holding company that owns stakes in a number of cable channels and other media properties -- to meet those conditions unless the spinoff is not given a favorable tax ruling from the Internal Revenue Service. In such a scenario, AT&T said it would instead put its TWE stake into a trust and sell it instead.
 The FCC, seeking a more firm answer, insisted on the TWE stake Thursday, raising the question of whether AT&T would be able to follow through on its spinoff plans.
But the New York-based telecom reiterated Friday that it believes its current spinoff plans comply with the original FCC conditions and has no intentions to change them.
"The bottom line is we're going to do what the commission wants by the deadline they set," said Jim McGann, an AT&T spokesman, referring to the May 19, 2001, date by which AT&T must meet the MediaOne regulatory conditions.
McGann said he did not know when the IRS might issue its tax ruling, but said the original FCC order gives AT&T until mid-March to change its plans if it doesn't believe its original action will succeed.
AT&T shares inched up 31 cents to $17.38 in early afternoon trading. 
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