AT&T Corp. formally began the process of breaking up the venerable company for the second time Friday, announcing it had filed a proxy statement with the U.S. Securities and Exchange Commission.
The proxy asks shareholders to approve the creation of two tracking stocks for the company, one to mirror the financial performance of AT&T's long-distance and other consumer business and another to reflect AT&T's cable business performance. The shareholders' meeting will be scheduled at some point during the second half of the year.
AT&T plans to break itself into four separate companies, as announced in October of 2000. AT&T spun off its wireless assets in a tracking stock issued last year. After shedding the long distance and cable companies, the remaining business unit would be called AT&T Business, focusing on business services and networking.
AT&T's long distance business has suffered with increasing competition, weakening market share and lower margins. However, AT&T picked up co-location assets in March from the defunct digital subscriber line (DSL) company NorthPoint Communications Group Inc., giving its consumer group the potential for an additional revenue stream.
The AT&T Broadband tracking stock will contain AT&T Cable, along with its stake in Excite@Home Inc.