Microsoft Tries Again to Get EU OK on Telewest

BRUSSELS (07/05/2000) - Microsoft Corp. will submit new proposed concessions to the European Commission Wednesday in the hope of overriding the Commission's concerns about the company's planned purchase of a 29.9 percent stake in Telewest Communications PLC, a U.K. cable operator, according to a company executive.

"We are in communications with the Commission's staff, and we will be submitting a proposal later today," John Frank, Paris-based Director of EU Law and Regulatory Affairs at Microsoft Europe, told IDG Wednesday. He declined to provide any details about the content of the new remedies. The Commission declined to confirm or deny that it had received new concessions from the company.

"I will not say anything more today," Amelia Torres, Commission spokeswoman for Competition Commissioner Mario Monti, said in response to questions during the daily briefing at the Commission.

The European Commission is concerned that the Seattle-based company will use its dominant position in computer operating systems to leverage a similar hold over the expanding software market for television set-top boxes, through which much of Europe will access the Internet.

The planned investment would give Microsoft joint control over Telewest with AT&T Corp.'s Liberty Media, which owns a 25 percent share in Telewest. Last week, however, United Pan-Europe Communications NV, the cable TV operator, announced that it planned to buy Liberty Media's stake in Telewest.

Although Microsoft has already offered to desist from influencing Telewest's choice of software for the set-top boxes, the concession has proved insufficient to allay the European Commission's concerns.

Microsoft will therefore submit the new concessions to the European Commission, which under EU merger control procedures is the deadline for presenting so-called "remedies."

The deadline is one month prior to the Aug. 5 legally binding deadline for a Commission decision authorizing, prohibiting or requiring major changes to the acquisition. Although Frank declined to provide details about the new remedies, he stressed that they would still involve joint control of Telewest. He hinted that if the Commission still finds the remedies insufficient, the company is prepared to look at other possibilities.

"We are committed to working through a deal," he said, adding that, "We are looking at all avenues."

The European Commission spokesman is available in Brussels at +322-295-4629.

Microsoft Europe, in Paris, can be reached +331-46-35-1010.

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