AOL mulls bid for AT&T broadband

AOL Time Warner is set to bid for AT&T's cable division, AT&T broadband, according to US reports.

AT&T rejected a $52bn bid by US firm Comcast in July, sparking rumours that AOL Time Warner may launch a bid.

If the bid - which would require regulatory approval - were successful it would give AOL Time Warner over a third of the US cable market.

Until now AOL has had little confidence in being given the green light by regulators. However, the US Department of Justice's softening of its stance against Microsoft last week and Friday court rulings making media mergers easier have encouraged AOL to begin talks, the New York Times reported.

AOL is thought to be preparing to present its plans at an AT&T board meeting on 20 September but may face competition from Cox Communications, Walt Disney and Charter Communications.

Microsoft will be one rival watching developments with interest.

Such a strong cable position would strengthen AOL's hand in the consumer internet market, where it has begun to clash repeatedly with the Redmond giant. It could potentially throw up a barrier to Microsoft's expansion into ecommerce, information and entertainment services.